Tax issues are one of the most complicated subjects to deal with. Thus, it can be concerning when the Internal Revenue Service (IRS) wants to audit you.
Here is what you should do after the IRS notifies you of an audit.
Understand the reason for the audit
The IRS can select you for an audit due to random selection or related examinations. With random selection and computer screening, the department uses a statistical formula that compares tax returns against “norms” for similar returns. Thus, your records may be selected for a simple mistake, which you can be allowed to correct, for instance, by filing an amended return. However, at times, the issue can be complicated.
With related examinations, the IRS can summon you for an audit if your returns involve issues or transactions with other taxpayers. For instance, if your business partner has a tax issue, you may also be questioned.
Therefore, before panicking, you should obtain more information about the audit. Since the IRS will notify you of an audit by mail, you can get more information through the same route or call.
Get the required documents
When the IRS contacts you, they will inform you of the documents you need for your audit. If the audit will be conducted in person, you should ensure you have all the required documents to hand. If the audit is to be conducted by mail, you should ensure you send everything they request.
Adequate information and documentation are crucial when facing an IRS audit. It will also help to get legal guidance to avoid costly mistakes.