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| AUDIT TIPS |
We recognize that an Internal Revenue or State Tax Department audit is one of life’s more stressful events. Here are some tips to help you cope.
#1 The letter from the Internal Revenue Service usually begins: “We have selected your return for examination. Please call us to arrange…”
Our advice: Do not make the call yourself. Instead, immediately contact your CPA or tax attorney to represent you. He or she will have you sign a Power of Attorney giving him/her authorization to represent you.
#2 While you have the right to be present along with your representative during the audit, we suggest that you find some other useful activity on that day! The agents are trained to ask probing questions and Fifth Amendment protections (ex., the right to remain silent) do not apply here. An experienced CPA or tax attorney will give a truthful response that is limited to the question.
#3 “I’ll just give the IRS a shoebox full of receipts and let them figure it out. They’ll be so confused they’ll drop my audit like that!” WRONG! A messy pile of documents will only frustrate and annoy the agent. Try to organize the paperwork as well as possible and, where documentation is missing, try to reconstruct the information. (Helping to organize and reconstruct your records is a vital part of our service.)
#4 Know your rights. Along with the dreaded audit letter comes a short pamphlet called “Taxpayers’ Bill of Rights”. It makes for dry reading, but you should read it nonetheless.
#5 The letter notifying you of your audit will probably propose a date to meet, usually within two weeks. There is no problem asking for more time to gather records and, of course, develop a strategy. (Again, this should be done by your representative.) The request for postponement does not create an unfavorable impression on the Internal Revenue Service’s part. It is quite routine.
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