What You Should Do if the IRS Is Auditing You


The IRS selected 1 million tax returns from 2017 for audits. While this means that they audit roughly 0.5% of all taxpayers, there is always a chance that you will be next. If you already received a document from the IRS that informs you of the audit, you should follow these steps.

1. Address the Letter

Receiving a letter in the mail that is from the IRS is never something people anticipate with joy, except when they know it is a tax check. When you get this letter, understand that the IRS will follow through with what it says. If the letter says they want to complete an audit, they need to do this. If you do not respond, they will assume that they are correct in their findings.

The reason they audit people is often for purposes related to unclaimed income. For example, if you earned money through a 1099 and did not report the income, the IRS may audit you. If you fail to respond to the letter, they will assume that you owe the taxes for the income from this 1099. Therefore, they will send you a bill in the mail if they do not hear from you.

If you want to avoid this, contact a tax attorney for help and ask them what you should do next.

2. Send the Documents They Want

The tax lawyer you hire will review the situation and will likely suggest sending in the necessary documentation. This documentation is anything related to the issue in question. For example, if they want to know more about your write-offs, they will ask you for receipts. If they need more information about 1099 income, they may ask to see your 1099s. If you send the correct documents, you might find a resolution for the issue.

3. Pay the Money

If you discover that you made a mistake with your taxes and the IRS was right, you will likely owe additional funds for your tax return. If this is the case, the easiest way to resolve the issue is by paying the debt.

But what happens if you cannot afford to pay it? Your lawyer will offer you options at this point. One might be to work out an installment loan repayment plan with the IRS. There are other options, too.

If you are dealing with an IRS audit, do not ignore it, and do not attempt to handle it alone. Hire a tax problem lawyer for help.


25 March 2020

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