When you hear the words IRS Audit, in any context, a chill goes up your spine. When you see those words and your name in the same sentence, that chill becomes a panic. And once you are done hyperventilating, you will have a BUNCH of questions.
Tax attorney Joseph M. Arndt and the IRS Away team would like to take a look at some of these IRS audit questions, courtesy of the IRS itself. And we would also like to remind you that, if these questions apply to you, you have somebody on your side!
IRS Tax Audit Question #1: Why Me?
Did you do something on your IRS tax return to draw their attention? Maybe, maybe not. Sometimes it’s a matter of random computer selection. The computer compares you to other people like you – they call this the Norm. If your IRS tax return differs from the Norm too much, that can be a trigger.
Other times, someone else out there in the Norm – somebody with income or deductions similar to yours – has been audited. Since you are somewhat like them, you get caught in the net. When the computer flags you, it goes to a real live person who reviews your IRS tax return and then decides whether or not to move the audit process forward.
IRS Tax Audit Question #2: What is the Process?
First of all, if the IRS goes forward with the audit process, they will notify you by mail. In this era of online and telephone phishing scams, that’s important to remember.
As we have said previously, the location of the audit is a good indication of how serious your IRS problems may be. A “by mail” audit may simply request for missing documents. A “come into the IRS office” audit may be looking for unreported income or improper deductions. An “in your home” audit is the most serious, and includes a thorough investigation of your home and belongings.
Regardless of the severity, you should take any audit seriously, and seek the professional help of Tax attorney Joseph M. Arndt and IRS Away!
IRS Tax Audit Question #3: What do I Need?
The IRS will tell you exactly which documents they require. Here is a potential list. This might include hardcopies of documents, or electronic ones. Be sure to ask the tax auditor what is acceptable. Hopefully you have kept all of your documents for (at least) the past three years, though many people prefer seven years.
IRS Audit Tax Question #4: How do I Respond?
The IRS will tell you how much time you have to respond. If you send your records by mail or other delivery service, ALWAYS request confirmation that they received it. If you need more time to pull your records together, you can send a written request for a 30-day extension (for a by-mail audit) or contact the auditor personally (for an in-person audit.) There are certain conditions that determine whether or not they will grant the extension.
IRS Tax Audit? Call IRS Away!
By now, you are staring to wade into the process. It typically will only get more complex from here. If you haven’t already done so, contact Tax attorney Joseph M. Arndt and IRS Away!
Next time: What happens now? And how will IRS Away help me navigate the tax audit process? Stay tuned!