No matter who you are or how much you make, most taxpayers eventually have to take on the IRS. The feared federal agency audits about one percent of the tax returns it receives each year. Now, that may not sound like much, but no one has better home-court advantage than the IRS. By their own numbers, only about fifteen percent of taxpayers make it out of an audit review unscathed. The rest are forced to remit additional funds, not to mention penalties, fees, and interest payments. With that in mind, here are six tips from an audit services professional to help you through the examination process.
Tip 1: Leave your anger at the door. Yes, the IRS and their representatives can be confrontational and combative… But the worst thing you can do is bring a mean or aggressive attitude to your meetings with them. Remember, you want to show them that you can be cooperative. If they get the impression that you are difficult, they are less likely to negotiate with you in the future.
Tip 2: Use their language. Like workers in any other specialized and highly technical profession, employees of the Internal Revenue Service have their own vernacular that few know. If you show them that you can speak their language, they may treat you with more respect. For example, you should always ask for penalties and fines to be “lowered,” rather than eliminated entirely.
Tip 3: Don’t say too much. We know it sounds counterintuitive, but it’s rarely a good idea to talk too much with IRS agents. After all, they are not your friends. Revealing too much or giving more details about a simple question can lead to misunderstandings that lead to further investigation.
Tip 4: Be honest. Nothing good can come of lying to a federal agency. Although the relationship is inherently antagonistic, it is based on trust. If an agent catches you in a lie, you will always be a suspect in the eyes of the IRS. It is also important to note that lying to the IRS is a federal crime that could land you in jail.
Tip 5: Call them before they call you. If you receive an audit notice, it’s always a good idea to contact your case agent as soon as possible. Your name and contact information will be on the official letter. Don’t go into details; just let them know that you are serious about resolving their issue with the agency.
Tip 6: Hire a tax professional. It would be a wonderful world if we could handle all our problems on our own. Unfortunately, that is not the case. As we mentioned, only 15 percent of audited taxpayers are not ordered to pay more. Everyone else has to catch up. As such, hiring a tax professional to provide audit services is often a good investment. Not only do they know the tax code like the back of their proverbial hands, but they are also qualified to represent you in all future dealings with the agency. Tax professionals will always try to reduce your fines and penalties. They may also be able to arrange a tax payment plan that allows you to pay off your debt in monthly installments.
These simple tips from an audit services professional can bring you a world of benefits when dealing with the IRS.