First Three Steps to Handle an IRS Audit

The day has arrived.? The mail carrier brought the dreaded envelope with a Department of the Treasury return address.? You open it and it is the notice of an audit.

Before panic sets in, sit down and breathe.? Read the letter carefully.? Understand that this isn’t the end of the world.? Refer to the previous article post made this week “Types of IRS Audits” that provides the definition of an audit.

The first step is to hire representation.? This representation should be an Enrolled Agent or CPA that has a history of dealing with tax audits and knows how to manage the process.? Some might ask, why.? When asked this, I have a simple rebuttal question: “If you were arrested for DUI, would you go to court by yourself or hire an attorney?”? I have yet to have anyone say they would go to court alone.? Why then would one face the biggest debt collector on the planet alone??

The second step is to gather the documents.? Your representative will help you with what documents are needed.? These documents requests will seem like a lot, but it is much better to go into the audit with every bit of supporting documentation in existence than to be missing something and have to reschedule.? Auditors may see a forgotten document as a reason to expand the audit to more years.

The final step is to be so completely prepared that the auditor can’t find anything else to ask about.? Your representative will compile the documentation for the auditor and will manage the audit.? Let that person do their job.?

These are the steps to prepare for an audit.? During the audit, let your representative do all the talking.? To carry forward my analogy about going to court, your attorney would be doing all the talking.? The same is true here.? The representative knows what to say and equally, if not more important, what not to say.?

If this day arrives, contact BTM at 678-717-9818 and let us take it off your shoulders.

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