What to Do When You've Been Audited by the IRS
You've filed your taxes and then you get a call: the IRS thinks the return you filed is incorrect. And so they audit you. Once the IRS audits you, they will decide -- either by mail or in person -- whether the tax return is in fact correct or not. If the return is correct, you have no worries. If the return is not correct, here is what you will want to do.
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First contact
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When the IRS decides your tax return is incorrect, they will send you a letter ; you can then choose to agree with their findings and pay the tax and any interest, or you can disagree with the findings.
If you do not agree
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If you do not agree with the IRS' findings, the IRS will explain your right to an appeal. If an agreement can't be reached, you have the option of filing an appeal within 30 days.
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An appeal
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If you choose to make an appeal, it is done with an appeals office that is independent from the IRS.
Now it's time to pay
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You have several payment options : you can pay the full amount, you can set up monthly installments, you can apply for an offer-in-compromise -- which allows you to pay less money than what is owed if the IRS can't collect the full amount from you -- or you have the option to delay payment.
Contact
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The one important thing to remember when you've been audited is to always respond to the IRS. It's a lot easier to handle the situation when you are proactive and don't ignore their notices.
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