In the event you are ever audited by the IRS, here are some recommendations:
- Keep the IRS from holding the audit at your business or home. Instead, engage a professional and meet at the IRS office or at the tax professional’s office.
- Five the auditor no more information than he or she is entitled to. Do not talk during the course of the audit any more than necessary.
- The IRS must complete and audit within 3 years of the time your tax return is filed, unless the IRS finds tax fraud or a significant underreporting of income (Both of which extend the deadline).
- If you are missing receipts or other documents, you are allowed to reconstruct records.
- When you receive an audit report, call the auditor (or have your representative do it) if you don’t understand or agree with it. If necessary, have your representative meet with the auditor’s manager to see if a compromise can be made.
- If you can’t live with an audit result, you may appeal within the IRS or file a petition to go to tax court.