Top Ten Tips for Surviving an Audit
Convince the IRS you were entitled to the credits, deductions, and exemptions you took.
- What you'll need to do. In an audit, you must convince the IRS that you reported all of your income and were entitled to any credits, deductions, and exemptions that are questioned.
- Delay when possible. Postponing the audit usually works to your advantage. Request more time whenever you need it to get your records in order, or for any other reason.
- Don't host the IRS. Keep the IRS from holding the audit at your business or home. Instead, go to the IRS or have your tax pro handle it. Field audits (at your place) are used mainly when there is business income; consult a tax professional before hosting a field audit.
- Prepare your records. If you are missing receipts or other documents, you are allowed to reconstruct records.
- Manage your expectations. Don't expect to come out of the audit without owing something -- the odds are against you. Don't try to compromise on the amount of taxes to be paid; instead, negotiate the tax issues with the auditor.
- Don't answer unless asked. Give the auditor no more information than she is entitled to, and don't talk any more during the audit than is absolutely necessary. Don't give copies of other years' tax returns to the auditor. In fact, don't bring to an audit any documents that do not pertain to the year under audit or were not specifically requested by the audit notice.
- Read up. Research tax legal issues by using free IRS publications and commercial tax guides. If you are still unclear about the tax law or how to present your documents to an auditor, consult a tax pro before the audit.
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