What to do if the IRS Audits your Tax Return

People dread being audited by the IRS, but it does happen to a few unlucky taxpayers every year. About 1-3 percent of all tax returns are selected for audit by the IRS. Most audits are due to incorrect information, or because a taxpayer is claiming deductions that the IRS suspects might not be above board. Usually you are going to be audited if you have a higher income, but anyone is susceptible to an audit, so here is what you need to do in case of an audit.

The first thing that you need to do is gather your information as soon as possible. Sit down with your records and make sure everything is correct on your return. Make sure you have everything that you need as proof of your income, deductible assets and other information that you used to file your tax return. Some audits are simply requests for more information, so it is possible you just need to send proof of, or clarify something on your return.

If the audit is a serious one, or you have cheated on your taxes, it might be good to get a tax lawyer to help you out. The IRS is going to have a ton of attorneys and other specialized tax experts that are going for the kill when it comes to getting as much money out of you as possible. The tax code can be a confusing one, so you might even want to get a lawyer or CPA even if you can prove that you were taking all the deductions that are coming your way.

The best thing you can do is to stand firm in your position, and not give out any information unless requested formally from you. There is no reason to talk about anything that might get you in more trouble, or to give evidence to them that might not even be requested. If they don’t ask for it, don’t volunteer the information when you meet with the IRS.

Never assume that an audit is an automatic loss. The odds of the IRS winning the case are very much in their favor, as they typically only go for cases they can win, but you have the right to fight your case, or make a deal. Remember that nothing can be collected until a final judgment is rendered and you don’t owe anything until the judge in your case says so.

Audits are something that are never fun, and hopefully none of us ever have to go through it. Self-employed folks are at a higher risk for audits and so are people who take a lot of deductions. While the odds of audit are typically low, you should always be prepared for an audit just in case.