What should you do if you get audited?

Although audits are considered a nightmare (and they can be one), they don't exactly mean that you will be facing a financial disaster. The big question is: what should you do if you get audited? Well, here are some tips that will help you to answer this very important question! 

We are not going to lie to you...audits aren't the best thing in the world. However, they shouldn't be as stressful as they are! Here you will find some tips that can help you weather this very unpleasant process!

What should you do if you get audited? Let's dive into it!

1. Avoid panicking: It may seem hard to achieve this, but stop panicking every time you hear the word "audit." You just need to make a mental check of your taxes, if you've reported them accurately and relax (a bit). Remember your yoga lessons, breathe in, breathe out, and call your tax advisor!

2. Read carefully: Once you receive an audit notice make sure that you read it carefully and fully conscious. There are different types of audits and many times you can do them from your computer.

3. Prepare the documents: Make sure you have all the documentation you need in order to succeed in the audit. Otherwise, you probably won't get the deduction. Check your investment gains and losses, these documents are usually misrepresented and the IRS can assume a zero-cost basis on unreported transactions.

4. Always submit on time: If you weren't able to control your panic, at least try to reach the deadlines! Submitting out of time can result in fines and lots of stress.

5. Let your CPA join you at an in-person audit: If the audit is in-person, you can ask a tax professional or your advisor to represent you at the audit. It's always better than representing yourself!

6. Get an enrolled agent for extreme cases: If you are aware that you've submitted fraudulent taxes and, therefore, committed criminal acts, you will be needing more than a CPA at the audit. Make sure you find an enrolled agent to help you. In fact, they might be the only ones who can help you.

7. Pay your debts: The sooner you pay what you owe, the faster this whole situation will be over! Otherwise, you might face interest or penalties.

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