What you need to know about being audited

You're being audited!The words you never want to hear and create panic in everyone.Being audited takes time, and will most likely cost us more money.The IRS has 3 years from the date you filed your taxes to request and audit, unless they actually suspect you; then they can go back as far as 6 years.This article will provide you with a little more information about what you need to know about being audited.

Types of Audits

1. Correspondence audits.These are the majority of audits and take place through the mail.You will likely be required to appear before an IRS agent in a field office.You will receive the notice of where and when to appear, and what documents you will need to bring in the mail.It is unlikely with this particular audit that they will be picky with your return, and it should only last a few hours.
2. Field Audit.This is the type of audit where an IRS agent will come to you.It is more common that this will take place in your place of business, and is most common among small business owners.You will want to have a tax professional there with you as it is likely that you could owe additional taxes.

Preparing for an Audit

1. Hire a professional or chance it on your own.If you prepare your own taxes and are familiar withal the paper work and different areas of your return then you may be able to handle this situation on your own.You also want to take into consideration the amount that is being disputed; if it is small, then hiring a professional may cost you more money than just doing it on your own.And vice versa; if you do not prepare your own taxes, have a minimal understanding of the return, or there is a considerable amount of money in question then hiring a professional may be the better choice.
2. Be polite.I'm not sure that there is anyone out there that appreciates the IRS coming to your home or business, but being disagreeable or hostile will only make things worse.If there is something you disagree with the auditor about, try to state your opinion professionally; don't beat around the bush, get right to the point, and then let him continue to do his job.If you have professional help, they will know how to handle difficult situations so follow their lead.
3. Bring only what has been asked for.This may sound like you're trying to hide something, but you're not.You do not need to offer more information than is asked for; you do not need to offer more documentation than is asked for.Focus only on the parts of your return that are in question.If the IRS auditor asks for information that was not in his original notice, let them know in a suitable manner that you were not aware that you needed those items.It is only fair that you have a chance to prepare yourself, and if they've asked for things that you do not have, you should have the time needed to get it.
4. It's only their job.Although you may feel a great agitation toward the IRS auditor, remember that they are only doing their job.You don't have to go out of your way to be extremely friendly, but try to be respectful.Keep your head cool, and organized.

How to avoid an Audit
If you have not been audited yet, and would like to keep it this way here are a few tips to avoid it:
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• Check your math.After you have filed your taxes go through it and check your calculations to see if there's anything you've missed.


• - Know when to file.If at all possible, get your return in early.


• - Plan your taxes using pre-audit strategies.If you think you might have a large deduction that will increase the chance of you being audited, attach a copy and send it with your tax return.Thinking ahead like this may help you avoid a full audit.

It's never fun to hear those words "you're being audited" but hopefully now you have a better idea of what you need to know if you are audited.