Survival Tips During A Tax Audit
Of all the tax returns received by the IRS, not even 1 per cent is being subjected to audits every year. Still, there are those that have terrifying experiences when it comes to auditing by the agency. If you are under the same situation right now, keep in mind to stay calm and refrain from panicking. An audit does not mean the end for you and it also does not mean that you will be paying extra taxes after. You can follow the tips below to avoid getting tax charges.
The first thing you have to do is find the trigger that made the auditor suspicious about your tax return. If you identify what the suspicious item is before the start of the audit then you will be able to prepare yourself. If you are facing a correspondence audit, around 80 per cent of audits are done this way, which means the entire process will be done through the mail them you will know right away what the problem is. The letter will be asking for proofs about the item in question. This is not the case with office or field audits. If this happens to you, it is best to consult a tax professional since they will be able to identify the problem easier.
Once you have identified the issue, you must back up your claims. If your deductions are questionable, make sure that you are qualified to have those. The problem is that you may not be able to save up all those papers in a span of three to six years. Missing documents should have support or proofs which will be able to pass the scrutiny of the auditor.
You may feel nervous during an audit which is normal but keep in mind to talk in a polite way without giving too much information. Answer only when being asked and your replies should be brief. If you want to make sure that your back is covered during an audit, you should subscribe to audit insurance. With this, you know that you are covered no matter the result of the audit is.