You file your taxes every year. You try to get all the details right, but there are so many small things to account for. You pay your taxes or receive your refund thinking that you’ve taken the correct steps — and then it happens. You receive a notice that you’re being audited by the IRS. What are you supposed to do now?
HOW DID THIS AUDIT HAPPEN?
First and foremost: Know that you haven’t necessarily made a mistake if you’re being audited. The IRS issues an audit simply because they’ve spotted something unusual about your taxes. In Las Vegas, this is especially important to remember, as many employees in the area work in the service industry and receive cash tips. The IRS only decides to audit you when they’re unsure — it doesn’t mean that all hope is lost.
TAX AUDIT FAQ
Still, receiving a notice that you’re being audited is a scary feeling. The best way to combat your anxiousness during this time is twofold: educate yourself on what happens next, and make sure you get the right attorney to represent you.
CAN THE IRS TAKE ANYTHING THEY WANT FROM ME?
The IRS needs a court order to take your house, but they can take steps like levying your bank accounts, garnishing your wages, and levying the businesses that you do contract work for. Ultimately, however, the IRS has to follow a strict process during an audit. They are required to give you adequate time to respond and/or dispute a collection process, and you can even appeal the process that they follow.
IS THE IRS JUST TRYING TO TAKE MY MONEY?
This is not the case. When the IRS sees abnormalities in your tax return, they want to look into the details. If you can show that your return is accurate and substantiate the items on the return, the IRS is happy to let you walk away owing nothing more than what your return states that you owe.
AM I IN TROUBLE?
Not necessarily! It’s easy to feel like you’re “in trouble” when a big name like the IRS is investigating you. It’s important to remember that the IRS only gets mean when you avoid them, and they’re more than willing to work with you if you’re organized and proactive. After your case, you can move forward as if the audit never even happened.
CAN'T I JUST HANDLE THE AUDIT MYSELF?
This is possible, but we can’t discourage this more. So much of the outcome of your case depends on the IRS’s perception of your cooperation. Taking too long to answer them, arguing with them over the details, or otherwise appearing to be uncooperative can lead to unfavorable outcomes. On the other hand, having an attorney who’s worked in the IRS and been through the process before will give you the greatest chance of receiving the best outcome.
ARE THE AUDIT RESULTS THE FINAL RESULTS?
They don’t have to be. If you disagree with the results, you can pursue court and undergo the appeals process. In fact, auditors and attorneys in the tax court may even be more willing to work out a deal than an IRS auditor may be since they have fewer restrictions to abide by.
If you’re being audited, you haven’t necessarily done anything wrong. Remember that a tax audit is just a fact-finding expedition — and the IRS is only seeking to prove the facts. In order to be successful, it’s crucial to know which stage of the audit process you’re in and to present the information in the IRS’ preferred format. Don’t try to handle these on your own. Let us break down the facts of your case and act as liaisons on your behalf.