You never have much of an option when Uncle Sam comes knocking about taxes, and the only solution is to get prepared for the process. Every year, the taxman carries out audits on individuals and businesses across the USA, and with their random selection criteria, anyone can be selected. Still, there are red flags that typically increase the chances of being selected by the IRS, and requests for audits must be handled carefully. Primarily, your aim must be to ensure that the agency investigates the items chosen for verification and to minimize your financial impacts. For these to be possible you have to adhere to the following tips;
Go professional. If you want to survive an audit, then the first step is leaving nothing to chance by having professional legal backing. A tax attorney must be a top priority if you want to make the otherwise stressful process more straightforward and risk-free. Overly, these professionals will give you the right guidance and shield you from the many IRS traps that could raise more questions on your tax obligations. Lacking these professionals by your side will see you easily make costly mistakes that can lead to years of regret.
- Use the audit notice as the guide. Once you have received an audit notice, do not panic and instead seek to understand it. This is why you need an IRS tax attorney as they will breakdown the letter for you. In all instances, the items being scrutinized will be made known, and preparation should focus on these key points. Generally, you must be extra keen on the red flags in taxation that the IRS has lots of interest in for their audits.
- Have organized financial records. The burden of proof lies with you as the taxpayer, and to achieve this; you need accurate records. If there are any missing supporting documents, it is your duty to replace them immediately. As a rule, never make the mistake of going before IRS auditors with messy records and expecting that they will ignore your case. This will instead be taken seriously, and the taxman will go after your accounts and bank records in full force.
- Avoid hosting the IRS. This is another core reason why you need a legal expert to make known the ins and outs of the audit process. The request for field audits at your home or business is always a trap as the IRS wants to have a better perspective of your lifestyle. Blindly accepting such a request will leave you vulnerable as the auditors will take into account lots of other aspects during the visit.
Do not forget about your rights as a taxpayer. While the IRS has the mandate to audit taxpayers, the law has got you covered during the audit process. It is, therefore, crucial to know the taxpayers’ rights outlined in the constitution and avoid becoming victimized for lack of knowledge. Overly, the presence of a tax attorney always makes the auditors tread carefully to avoid legal complications. The best part about IRS audits is that even after you have received the examination report, you can always appeal the results.