ADVICE FOR BEATING AND SURVIVING A TAX AUDIT
If you are selected for an audit from the IRS, you have no choice but to follow through with it. Two things you should strive for are minimizing financial impact and preventing the IRS from investigating beyond the initial items selected for the audit. There are times when you may get a refund or owe nothing more after an audit, but chances are you will owe money. It is important to enter an audit understanding how to prevent the IRS from looking at additional information and how to keep the financial impact of the audit to a minimum. Below are some tips to make it through the audit and experience the best outcome possible. Before going into your audit, you need to keep a few things in mind about the auditor or auditors you will encounter. Auditors have a very tough, stressful job because many people are angry, resent the fact that they are being audited, and will take it out on the auditors. Try to keep your cool around the auditor because they are just doing their job and want the audit to flow smoothly and calmly just like you do. Another important thing to keep in mind is auditors are trained to recognize signs that just don’t seem right, which means anything you say or show them in addition to what they requested can be used against you. Being polite and friendly can go a long way, but just be aware the auditor is examining you and your return. WHAT TO KNOW ABOUT TAX AUDITORS
• Do not lie or make misleading statements. The IRS may ask questions for which they already know the answers to see how much they can trust you. It is best to be completely honest, but do not ramble and say anything more than is required. • Don’t offer other years’ tax information. It is important to only bring in the documents that are stated in the IRS notice to limit the scope of the tax audit. • Have all required support. Going into the audit with all the required documents and having it organized can impress the auditor and make them realize you are willing to cooperate and make things flow smoothly. • Don’t give original documents to an auditor. The IRS is known for losing documents. If the auditor wants one of your documents, be sure to make them a copy and keep the original for yourself. • Understand how the IRS feels about substantial compliance. There may be times where you will not be able to come up with all of the required documentation to back up some of your deductions. • Appeal the audit if you don’t agree. It is your right to appeal an audit examination report. The best way to start is by calling the auditor you disagree with and make your argument. • Consider hiring a tax professional. A tax professional can represent you before the IRS. Chances are that a tax professional can help ensure a better outcome of the audit. • Be yourself during an audit. It isn’t just your tax return under review; you are being reviewed as well by the auditor.
ADVICE TO FOLLOW DURING A TAX AUDIT
• Be as brief as you can. Audits are stressful, and when people are nervous, they tend to talk too much. Auditors are trained to listen to everything you say. Talking too much is a very common mistake and can cost big money.
LOCAL BUSINESS PROFILE CEDAR ONE REALTY
Cedar One Realty is a full-service brokerage and property management company offering a wide range of services for buying and selling real estate as well as providing rental homes and apartments in the Ohio Valley. Cedar One is pleased to have a full-
time dedicated office staff to service our buyers, sellers, and renters and be there for them when they need us. Cedar One Realty merged with Featheringham Realty in 2016 and has a team of motivated real estate agents ready to work for you! Call 740-264-7131.
This newsletter is for informational purposes only and no legal advice is intended. Be sure to consult with this law firm if you have a specific question about your situation. And, remember Edward and Jeff don’t take any unplanned inbound telephone or in-person meetings. We believe each case deserves our undivided attention.
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