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3 tips for handling a face-to-face IRS audit

Many people dread filing their taxes. Even if taxpayers fill everything out they’re supposed to, the IRS may still dispute their submission, resulting in an audit. Depending on the circumstances, this may require taxpayers to go head-to-head with the agency.  

Audits can be stressful. according to a recent report, 1 in 4 Americans worry that their return will receive an audit. However, there are plenty of things people can do to prepare for one and navigate it successfully.

Understanding the audit process

When the IRS audits tax returns, they're trying to determine whether people filed their return accurately and made legally acceptable deductions. Audits mostly aren't random, as the IRS is more likely to select returns that have errors.

After someone files their return, the IRS has approximately three years to finish the auditing process. The agency has various methods for conducting audits, including by mail, telephone or in-person meetings. During an audit, agents will typically request documents and information and will expect the taxpayer to give them that information exactly how they ask for it. Once they get this information, they will likely ask detailed questions about the return. 

Tips for successfully navigating an audit

No matter a taxpayers’ situation, doing the following can help them move through the process with tact, grace and transparency:

  • Perform a self-audit: Before the process begins, the IRS will let you know which tax return they plan to audit. Taxpayers should review the selected return and highlight the items under question. They can support their claims by collecting any relevant documents. It may be helpful for them to review the IRS audit technique guide. The guide can help give taxpayers a better idea of how the agency handles audits.
  • Organize records: Some taxpayers may not want to spend time organizing their returns. However, this approach may not help them in the long-run. If taxpayers want to show IRS agents that they’re serious and cooperative, they should lay out and label their records neatly. Doing so can simplify the process and give taxpayers a better chance of coming out unscathed.
  • Avoid volunteering additional information: Giving the IRS the information they need is important. However, taxpayers should only disclose what agents ask for. If they discuss other deductions they’ve made in the past, the agent may use that information against them during the audit.

Remaining calm is crucial

Taxpayers should do their best to remain calm. The more relaxed and confident they are, the better chance they have of getting a favorable outcome. If initial meetings and advice from an accountant don’t clear things up, taxpayers can seek help from a trusted legal partner to appeal the IRS agent’s determination.

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Law Offices of Robert T. Leonard, APC

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