If you have received a letter from the IRS and are facing the possibility of a tax audit, it can be a very frightening situation. Fortunately, there are things that can be done which will help to reduce your frustration and to assist you through the process of having the audit. The most important thing for you to do is to get qualified help from a CPA or Enrolled Agent, who can talk to the IRS and represent you through the process. You will also want to keep the following tips in mind.
Don't Panic - Throughout the audit process, it is likely that you are going to come across many unknowns. This, along with the audit itself, can be very frustrating and can cause you significant stress. Make sure you talk to the enrolled agent or CPA as soon as possible so that you can understand the process, every step of the way. Avoiding panic can help you to get your paperwork in order and to remain professional throughout the audit.
Avoid Hosting the IRS - The IRS may give you the opportunity to have the audit at your home or place of business. It is always a better idea for you to have the audit at the IRS office and to do so along with your tax professional.
Be Informed - Although it is important for you to have a tax professional when you are going through the audit process, you should also educate yourself on the process as well. You can discuss this with the enrolled agent or CPA, as well as reviewing additional information on the Internet.
Try to Delay - The IRS has a limited amount of time to perform the audit from the date that you filed the return. It is always a good idea for you to delay the audit, when possible, because it can work to your advantage. Have the enrolled agent or CPA let the IRS know that additional time is necessary so that you can get your paperwork in order. There may also be other legitimate reasons why you could delay the process.
Be Prepared to Appeal - Unless the audit works in your favor, it may always be beneficial for you to appeal the results. This may also work in your favor in a number of different ways. At times, an appeal may help a compromise to be reached which would make it easier for you to pay any tax that that may exist.
Avoid Offering Too Much Information - One of the difficulties that may occur while you are being audited is offering too much information to the IRS. This problem can be overcome by allowing the enrolled agent or CPA to do the talking, as they will know what to say and what not to say. It is not necessary for you to go beyond the scope of the audit, and doing so may be detrimental to the results. Keep unnecessary information to yourself and use the tax professional that you have hired to your full advantage.