August 15, 2008, Newsletter Issue #76: Preparing For Your IRS Audit

Tip of the Week

Once you find out that you are going to have an IRS audit, there are some things you need to do to properly prepare yourself. Here are some suggestions.

Review your tax return in question. Review and recall what you recorded and why. Possible weak areas. If someone else prepared your tax return, go over with them any areas that might cause a weakness in your position.Find supporting documentation. For any amounts listed on your tax return, gather together all the applicable documents. You may need to provide these as evidence. Specific items. Find any documentation on items the IRS is specifically questioning. Know how and why you arrived at the figure that you did.Review the tax laws. If any area is pinpointed by the IRS in its notice, study that tax law area to become better informed. That way, you will prepare yourself for any questions. You will also need to let the IRS know why you treated an item the way you did.Contact your power of attorney, if needed. See if they are available on the audit date. If not, question them about any items listed on your tax return. By having someone available to answer technical questions, you can only benefit. Documents. Do not take any more information with you to the IRS audit examination than they (IRS) originally asked for. Tight lips. Do not volunteer (or mention) any additional information to the IRS. The more you say, the more they can question. Fraud. Contact your attorney if you think your tax return may be fraudulent. They can provide insight and background information in the intricacies of your tax return.Make certain that the audit date is far enough in advance for you to properly prepare yourself.

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