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7 Tips for Getting Through a Tax Audit in One Piece

Written by Savannah Marie, Community Blogger | Feb 23, 2015 9:52 AM

Getting audited can be a nerve-wracking experience. After all, tax evasion is a crime punishable by a 5-year imprisonment, a $250,000 fine, or both. But if you know you've been a good taxpayer, and the IRS decides to audit you anyway, here's what you can do to make it through the ordeal.    

Take a Deep Breath

It's normal to be afraid of an audit. When that fear trips you up in front of an IRS agent, though, an audit becomes the least of your worries.

Give yourself time to process what happened. Sit down, have a cup of tea, and breathe in and out, until you feel calm. Once your mind is clear, you can assess your situation accordingly, and follow the next steps on this list.

Double-Check Your Paperwork

Tax audits happen for a number of reasons. It could be a mathematical error or typo on your return. It could be a failure to fill out just one more form. Or it could be the fact that the company you work for is being audited, in which case you need to enlist third-party services to help you.

At any rate, it won't hurt to go over your paperwork one more time. Look for the items that ping the IRS' audit radar. Find out how you can correct these items, or clarify them with the help of supporting documents.  

Consult a Professional

Even if you've cleared up all possible audit triggers on your own, it's still a good idea to consult a CPA or lawyer anyway. This person is more knowledgeable about Harrisburg tax laws than you are, and may be able to fish out other triggers you've missed. Also, if the very idea of facing an IRS agent gives you the jitters, you can ask your CPA or lawyer to represent you.

Give Only the Information Asked of You

Be honest when answering questions, but don't volunteer information. You don't want to give the agent more reasons to extend your audit period. If s/he only has a couple of issues with your return, leave it at that.

Say 'No' to Deadline Extensions

Generally, the IRS only has three years to audit any single taxpayer, from the time returns are filed. However, they can extend this period if there's a "substantial error" in your tax return, and if you allow them. In other words, you have the right to refuse the extension.

When you do this, you force the agent to work only with the information you provide them. Be as cooperative as you can during this scenario, so that the IRS won't hold your refusal against you.      

Prepare to Dispute the Agent's Findings

Like you, IRS agents are human. A single agent could be auditing as many as dozens of taxpayers at any one time. That can make the agent more likely to commit mistakes, and more likely to see errors in your return that aren't there.

If you're sure everything is in order, and the agent insists otherwise, be ready with your supporting documents. Calmly argue your case by sticking with the facts. Don't snap at the agent, or call him/her names; s/he's only doing his/her job.

Remember Your Rights as a Taxpayer

The IRS specifies some of your rights here, though you might want to get more details here. If you know what the IRS agent can and can't do during an audit, it's harder to get rattled. Don't be afraid to take the case to the courts, should it come to that.

Final Thoughts

When it comes to tax audits, it helps to keep things in perspective. File your taxes according to the law, but assume you'll get audited at least once in your lifetime. That way, you'll be ready for any nasty surprises, and be able to handle them in the least messy way possible. 

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