Receiving a letter from the IRS can be extremely stressful for many of us. You may be wondering why me, did you make a mistake, did you finally get caught or a variety of other questions may be running through your mind.
Here are 12 important most common mistakes made by taxpayers in an IRS Tax Audit:
Not responding to the IRS Audit letter; Failing to adequately prepare before going to the IRS examination; Failing to read your taxpayer rights and audit guidelines; Bringing a friend or trusted family member who is not a CPA, IRS tax attorney or other tax professional with you to the income tax audit; Allowing the IRS auditor perform the IRS audit at your business or home; Volunteering information the IRS Auditor or Tax Examiner has not asked for; Falsifying supporting records you don’t have; Don’t sweat the small stuff. Concentrate on the major issues and move on;
Trying to make friends with the IRS Auditor and thinking he will put your interests ahead of his job interests;
If the tax audit is not going well, stop the examination and exercise your right to have professional representation; If you’re being treated unfairly, you have the right to meet with the IRS Audit Manager and have the examination transferred to another tax examiner; Not agreeing with the tax audit results and not exercising your rights to appeal the proposed tax assessment;
To the extent you owe taxes and the examiner has been successful in finding income tax problems, the IRS auditor will likely assume you have made the same mistakes in other tax years and will apply the same logic to other years as well. When evaluating your exposure, apply this logic to other years that can be challenged as well before you begin the examination. You may require the services of a taxpayer resolution specialist to do this.
There’s quite a bit of free tax information readily available on the internet regarding tax audits, what you should do, what not to do and more. The key to being success in an IRS audit is simply to be as prepared as you can possibly be and to get the best professional representation you can, whenever possible, to help ensure your success.