Being Audited by the IRS


IRS audits are uncommon, but they can be extremely harmful if not handled properly with appropriate representation and proof. Many taxpayers become terrified when they hear the words “audit,” particularly “IRS audits,” since it takes their breath away. However, many people are unaware that IRS audits are not as awful as they believe. You must ensure that you specify the sort of audit requested, and you will be able to make sense of all the misunderstandings.

Types of IRS Audits:

The IRS can conduct a variety of audits, many of which do not need a visit to your home. To begin, let us define an IRS audit. An IRS audit is essentially an assessment of an individual’s or an organization’s financial statements and all financial information to ensure that all income and tax forms are appropriately recorded. Its primary purpose is to ensure that you are reporting the correct amount on your tax forms to be taxed. The IRS can conduct three sorts of audits to verify your tax information: correspondence audits, field audits, and office audits. Let’s take a good look at those audits and see what you can do to deal with them effectively.

Correspondence Audits:

IRS Audit

Correspondence audits are audits that are conducted exclusively through the mail. They are the simplest type of audit to deal with because they do not focus on large areas of your financial records, but rather on minor problems on your tax return and tax forms.

The IRS can send you two sorts of letters in the mail to finish the audit. The first is a simple letter informing you that you owe money to the government. A simple letter can be sent if there is an error on your tax return; for example, the IRS will notice if you declare the wrong income by mistake. For example, if you only record $3,500 of your $4,000 income, you will be required to pay taxes on the remaining $500.

If you receive a letter like this from the IRS, the first thing to do is not panic. Accepting that you made a mistake and paying the amount owed, whether it is taxes, interest, or penalties, is a straightforward answer. However, if you do not believe you made an error and wish to dispute, you may do so by asking for further examination, which can be done over the phone or by mail. To ensure that you follow the proper measures while dealing with the IRS, consult with a tax accountant who can assist you assess the issue and professionally represent you to the IRS. Schedule a consultation right away with our Miami Tax Accountant!

An audit letter, which requests specific paperwork and proof to validate the deductions made on your tax return, is another sort of letter that the IRS may send. The IRS requires actual proof that demonstrates your deductions are genuine, such as a cancelled check for a deductible expense. All you have to do to address this problem is provide the appropriate paperwork to the IRS, making sure to send a copy rather than the original. If you are unsure about which documents to send, it is usually better to call a tax accountant, such as SDG Accountants, and ask their assistance in resolving this situation.

If you do not have the paperwork and hence cannot provide confirmation of the deduction, you can simply pay a fee to have your audit cancelled. However, if certain taxpayers wish to further argue and pursue the issue, they may do so via mail. Remember that if you hired a tax accounting firm to complete your return, they can serve as your perfect representative to the IRS and resolve the issue for you on an hourly basis.

Field Audit:

A field audit is a physical visit by the IRS to your home, place of business, or the office of your accountant. This is a significant audit because an IRS agent will come to your door and demand an answer in person. Many of these audits are more likely to occur if you operate a business than if you are an individual. In instances like this, you must consult a tax accountant who can represent you before the IRS. It is difficult to deal with the IRS on your own; you require the assistance of a professional who can counsel you wisely and negotiate with the IRS on your behalf.

Office Audit:

IRS Audit

The IRS may want to question you in person during an office audit. This form of audit is severe because it forces you to deal with the IRS in a professional setting face to face. You will receive a letter in which you will be asked to appear at a specified location on a specific date and at a specific time. If you are unable to attend the appointment, you can reschedule it by contacting the IRS.

It is critical in instances like this to bring a tax preparer or a tax professional with you who can represent you to the IRS. A regular taxpayer does not have the same level of expertise as a tax preparer or tax attorney; the IRS is very sophisticated and talking with them is difficult. You might become nervous and say things that should be kept confidential, which is why you need the assistance of a Tax Preparer.

How to Respond to IRS Audits?

SDG Accountants comprises tax professionals who are experts in dealing with the IRS; we can assist you in navigating the audit and communicating with the IRS on your behalf. All you have to do is use our consultation calendar to schedule an appointment with us and explain your position to our accountants and tax professionals. From that point on, it is not only your problem but also ours, to address the problem efficiently. Now is the time to schedule a consultation!