Two types of audits are conducted by the Internal Revenue Service; the face-to-face audit and correspondence audit. The IRS issues of taxpayers are just about to start in case they receive a notice for one of these two audits.
Correspondence Audit
The tax returns that are filed by the taxpayers are assessed at the centers of IRS. The computers check for errors in the return and if found any, a notice is sent to that particular taxpayer. This notice is very important and is a serious matter of law which should not be taken lightly. In this way the correspondence audit is conducted by the IRS through mail. If you don’t agree with the contents of the notice, you can take immediate action and reply back with supporting documents.
Face-to-Face Audit
A revenue agent or a tax auditor personally meets the taxpayer and takes an audit of his taxes in case of a face-to-face audit. The IRS sends a notice to the taxpayer asking to fix an appointment with the agent. The date and time of the meeting is sent to the taxpayer so that the audit can be conducted. There are few things that you should remember when you get such a notice from the IRS.
- Do not ignore the notice; if the IRS is replied within 30 days of receiving the notice, they have a right to take further action.
- Carefully read the notice and follow the instructions in it. It will specify the items that are under review and will also mention the documents which would be required during the audit.
- It is your responsibility to prove to the IRS that the information provided in the tax return is true. Make sure that all the records are well organized and in place so that further complications can be avoided.
- Provide only the copies of the required documents and keep the originals safely with yourself so that you have the record.
- Also remember that if you do not approve of the outcome of the audit, you have a right to appeal.
- If you are in a confused state about the audit, you can probably consult a professional IRS tax attorney.
These tips can prove to be helpful when facing an IRS tax audit. Another thing that you should keep in mind is not to panic during the audit and answer everything that is asked truly. Dealing with an IRS tax audit is not a difficult task if done in a systematic manner.