3 tips to help if the IRS comes knocking

You receive the letter you have been dreading: The Internal Revenue Service (IRS) has requested a review of your tax return. This could also be due to many various reasons. Perhaps your income in your tax return didn’t match the amount reported to the tax office, or your expenses seem a bit questionable. If so, you might be the lucky winner of a full IRS audit. No matter why the IRS decides to come knocking, one thing is definite – you wish to be prepared.

As a former Internal Revenue Service agent, I actually have had the opportunity to take part in many audits, and every time the key to surviving this unwanted ordeal is ensuring you understand your rights and responsibilities.

Fight

First, you must discover what’s being audited and review the document request provided by the examiner. This application will contain the information essential to substantiate the amount reported in your tax return. Remember that in a civil tax audit, the burden of proof rests with you.

Gather documents to substantiate questionable items in your tax return. If you have no records, there continues to be hope! Remember that there are other methods of justifying items in your tax return. For example, if you’re a health visitor and have previously claimed vehicle expenses, consider obtaining patient records for the relevant tax 12 months and estimate mileage based on those visits. Examiners may accept various forms of evidence to support an item, including third-party testimony, affidavits, and other forms of verification.

Get help

If you do not feel comfortable just mentioning IRS letters, it might be a very good idea to hire an agent to work in your behalf. This may very well be a licensed public accountant (CPA), an enrolled agent, or perhaps a tax preparer. When you inform the IRS examiner that you just are in search of representation and the IRS receives your accomplished affidavit Form 2848, Power of Attorney, The IRS must only contact the representative in the future, so you will not have to talk to the IRS.

Don’t accept failure

If you disagree with the examiner’s position, you could have rights. First, you must raise your concerns with the examiner. Most often, the examiner might be willing to compromise on certain issues if you agree to sign the agreed report. However, if you’re unable to reach an agreement with the examiner, you’ll be able to request a gathering with the examiner’s manager or have the matter reviewed by the use of appeal.

Remember that the ultimate goal of each the hearing panel and the appeal is to close the case without one other trial. Therefore, if you’re persistent, there may be a high probability that you’re going to achieve favorable results.