Will you be representing yourself at a tax audit? This DIY tax audit advice is crucial to ensure success.
Did you receive a tax audit notice, and now you are looking for DIY tax audit advice?
If you will be walking into the lion’s den, without the advice or representation of a seasoned tax professional, there are a few important points you should remember.
Representing Yourself: What that Entails
Before making the decision to go it alone, consider a few of the most common issues faced by those who have walked this path before you. Remember that the IRS has a whole team of tax experts whose sole purpose is to get more money from you. This means they are well versed in the tax code, especially those little nuances you had no idea existed.
They are also well trained to pick apart any documentation you might provide. If even a single comma is out of place, that can be enough of a reason for them to argue all sorts of tax provisions or limitations that can make your deductions vanish like smoke. Besides that, auditors watch and listen for the slightest discrepancy that might indicate you were untruthful when filing taxes.
In order to handle the DIY tax audit, you must be well versed in your rights and taxation. You must also know how to limit the amount of information the IRS will be able to glean from you. These two points are tough to accomplish; but if you believe you meet these two requirements for representing yourself, keep reading.
DIY Tax Audit Advice
Without further ado, here is advice that might help you keep more of your money when representing yourself during a tax audit.
Do remember to:
- Keep clear records. The IRS will scrutinize every record you have while looking for every dime they can collect. Make sure all records are clear, concise and in impeccable order.
- Delay if possible. The IRS must complete their audit within three years of your tax filing. The longer you can delay the audit hearing, the more likely they will run out of time to find other things to claim against you.
- Understand your rights. You have certain rights set forth under the Taxpayer’s Bill of Rights. Read and understand those rights, and employ them if things begin to go south.
And of course:
- Don’t host the audit. Field audits are often requested by the IRS, especially in the case of questions on business income. Don’t let them into your place of business, as that opens up the potential for even more trouble.
- Don’t be generous. Bring only the documents requested in the audit notice or those that pertain to the audited year. Don’t volunteer any information during questioning, and respond to any questions with simple answers and no commentary.
- Don’t get upset. Some IRS agents will try to upset or anger you with the hope you will say something that makes their jobs easier. Keep your cool, no matter what transpires, and you just might keep more of your hard-earned money.
If the audit doesn’t go your way or someone mentions tax fraud, even if it is only implied, it’s time to throw in the DIY towel and call the pros to handle the problem. Only those who are well versed in taxation have the tools to battle the IRS. They can serve as a powerful buffer between you and the IRS agents, helping you keep more of your money in the process.
To learn more about why hiring a tax professional is a good idea, get in touch with us.