How to Fight an IRS Audit

Nothing is worse than having your finances and personal matters exposed for the government to see. It is embarrassing and invasive when the IRS representative comes knocking on your door. You know that the IRS will be spending days going over documents and quizzing you on your income and tax forms.

Instructions

1. When faced with an audit, answer questions only while being represented by a tax professional. You do have this choice. You want to make sure that you can back up what you say, and a tax professional can keep you from talking yourself into some more hot water. A tax profession will also understand where the IRS auditor is going with his questions way before you do, and can help you give the right answers.

2. Try to hold any meetings with the IRS representative in a facility that is amenable to you. You can hold meetings at the facility or home where the records or kept, showing that you have nothing to hide. Or you can play it conservatively and take only the requested documents to the IRS office so that you show them only the parts they absolutely need to see.

3. Cooperate with the IRS to the best of your ability. Hiding things now may present large problems for you later. Uncle Sam doesn't take too kindly to folks lying about their taxes, and the government has nearly limitless resources with which to attack you. Honest mistakes are generally considered forgivable by the government, so there is nothing better than to tell the truth.

4. If you feel you are being wrongly targeted, you can always continue appealing until auditor mistakes can be found. There are many cases in which the auditors themselves make mistakes during an audit. Wait until your tax professional sees no other way than to agree with the auditor's case.

5. Take your appeal to the U.S. Tax Court to review the auditor's filings. You can represent yourself in the U.S. Tax Court, and the proceedings are generally informal and can help you better position yourself to win your case. It is recommended that you have your tax professional on hand, however, as he will be able to help you wade through the ins and outs of the audit. If that doesn't work, then you can even take your case to the U.S. Court of Appeals. Keep in mind that the U.S. Tax Court has the final ruling.

Tips & Warnings

• While an IRS audit is scary, there are many things you can do to fight back or at least ease the struggle. By telling the truth, having a tax professional on hand and appealing, you can fight the auditor's filing and possibly win.