Receiving notice that you have been selected for an Internal Revenue Service audit is not a cause for panic. You have rights as a taxpayer, even during an audit, and understanding those rights can help you better navigate the audit process.
An IRS audit is an examination of your financial information to verify that it was reported correctly on your tax forms. You might have been selected for an audit as part of a random check, if something on your tax return did not fit an expected pattern or if you had transactions with others who have been selected for audit.
As a taxpayer, you have 10 fundamental rights when dealing with the IRS. In addition to the right to retain representation, there are four rights that are especially pertinent if you face an audit. They include the rights to:
- Be informed. You should receive clear explanations of the laws and procedures that pertain to your dealings with the IRS. You should also be informed about any decisions the IRS makes regarding your taxes.
- Challenge the IRS’s position. You are allowed to raise objections to IRS decisions and submit additional documentation, which should be considered promptly and fairly.
- Appeal the IRS decision. In most cases, you can request an impartial administrative appeal. Following an appeal, you should receive written notice of the Office of Appeals’ decision.
- Finality. You have the right to know the amount of time you have to challenge an IRS decision, the amount of time the IRS has to audit a specific tax year and when the IRS is finished with your audit.
Additional rights include quality service, privacy and confidentiality. You also have the right to a fair and just tax system, and to pay no more than the correct amount of tax.
No one wants to be audited, but if this is happening to you, keep in mind that you are not powerless. You have several rights you can exercise to ensure you receive the best possible outcome during the audit process.