What to Expect During an IRS Audit: A Step-by-Step Guide
What to Expect During an IRS Audit: A Step-by-Step Guide
An IRS audit can be stressful, but understanding the process and having the right representation can help you navigate it smoothly. Here’s a step-by-step guide on what to expect and why hiring an Enrolled Agent (EA) is crucial:
Step 1: Receiving the Audit Notice
The IRS notification comes in the mail, never by phone or email. The letter specifies the tax year under review and outlines the required documentation. At this stage, consulting an Enrolled Agent from Books, Taxes & More, ensures you understand the scope of the audit and your rights.
Step 2: Determining the Type of Audit
Correspondence Audit: Conducted via mail, requiring you to send specific documents.
Office Audit: Requires an in-person visit to an IRS office.
Field Audit: IRS agents visit your home or business for a thorough review.
Our Enrolled Agent can determine the best approach for responding to the audit and help you avoid common pitfalls.
Step 3: Gathering Required Documents
The IRS will request records such as receipts, bank statements, invoices, and other documents supporting your tax return. Organized documentation is key to a smooth audit. An Enrolled Agent ensures that your records are properly compiled and presented to minimize risks.
Step 4: Attending the Audit Meeting
If in-person, bring requested documents and be prepared to answer questions. You may have a tax professional represent you. Having an Enrolled Agent handle the audit meeting on your behalf can significantly improve your chances of a favorable outcome, as they are experts in tax law and IRS procedures. It is always best for the taxpayer to remain silent and let his representative speak.
Step 5: Audit Outcome
No Change: Your return is accepted as filed.
Proposed Changes: The IRS finds discrepancies and proposes adjustments. Your Enrolled Agent can negotiate on your behalf.
Tax Due: If you owe, you’ll receive a bill with payment options. Our Enrolled Agent can help reduce penalties and explore payment arrangements.
Step 6: Responding to the Audit Results
If you disagree, you can appeal within the IRS or take the case to tax court. An Enrolled Agent can represent you in appeals, ensuring the best possible resolution.
Final Thoughts
An audit doesn’t always mean you owe money—many are routine. However, having an Enrolled Agent from Books, Taxes & More represent you can ease the process, provide expert guidance, and ensure your rights are protected throughout the audit.
Contact Steve Perry, EA at 678-717-9818 or [email protected]
