Getting audited is probably everyone’s worst nightmare. To help you navigate this process, we’ve created a list of some helpful steps.
Tax professionals suggest you follow these steps to help you while you are being audited:
1. Don’t panic
This is everyone’s first reaction as soon as they get the notice. But there’s no need to panic. If you have reported your taxes accurately, or at least you tried to, it won’t be as bad as you think. If get the notice, the best you can do is take a deep breath and call the person who does your taxes.
2. Read the notice
There are different types of audits, so before panicking, read carefully. Many audits are computer document-matching rather than the long in-person process.
3. Prepare the required documents
In order to succeed during an audit, you need to have your documents organized. Provide your 1099s, K-1s, W-2s and canceled checks and reconcile them to the amount claimed in returns. If while gathering your documents you find out there are more deductions than you claimed, don’t be afraid to submit them in your response.
4. Don’t miss the deadlines
This will make everything worse. Missing a deadline can result in serious fines, so show the IRS you are willing to cooperate with them.
5. Do not talk yourself into trouble
IRS’s job is to take your money and use it for the government, so that’s what they will try to do. On the other hand, your job is to convince them that you are the one who should keep your money. Make sure your records are well organized and are easy to follow through so you don’t have to over-explain your documents.
Another important thing for you to keep in mind while being audited is that you should not be afraid to negotiate with them. If you feel like the agent got something wrong, don't be afraid to disagree!