How to Survive a Tax Audit

Using this guide, you can get some insights as to how to make an audit less stressful.

Difficulty: Moderate

Instructions

Things You'll Need:

• Paper
• Pencil
• Calculator
• Letter received from the tax authority

1. The first step when being selected for audit is: Don't Panic! Most people getting letters will usually look for a tax return specialist immediately and not really look at the letter. The letter does not tell you why you are being audited, just that you have been selected.

2. Read the letter. You are usually asked to just call the person on it to schedule. These are individuals who are not auditors, they are simply the ones scheduling appointments. Feel free to record your conversation with the auditor. It is legal to record the information, just make sure that you have informed whomever you talk to that you are doing so.

3. Start gathering your documents used when you did your tax return. If you used a tax return preparer, then they are usually included in the "taxpayer copy" that was prepared for you. By getting all of your documents together before you go to the audit (or have someone represent you), you save time and money in the long run.

4. Either go to the audit or have your representative do so. Sometimes, the taxing authority asks questions in a way that if "foreign" to taxpayers. In times like this, having someone with you or go there on your behalf is more helpful.

5. After the audit has been finalized, you will receive a letter of deficiency or surplus. When you get this letter, don't panic! You have appeal rights regarding the audit.

Tips & Warnings

• Remember, if you don't have all the required documentation, don't panic! Most times if you don't have a mileage log, for example the taxing authority will allow you to re-construct one. Most do not know this and panic that they will get into trouble.
• Be calm in your audit. The initial interview is just what is called, the "initial interview". Be polite and courteous and never angry.
• In the event that you do not have all the required documents, the taxing authority will either reschedule you for when you can, or will meet with you and give a request for information that you can send in at a later time.
• It is always a good idea to have representation, and if you have it, then you need not attend any of the audit meetings.
• When you meet the auditor, do not let him/her feel that they are in control. Being pleasant (even in the face of adversity) takes away from them the feeling that they have any final say. Many auditors try to intimidate the taxpayer. Remember, they have no authority to be afraid of, in fact, they work for you!
• If you lose the audit and lose your appeals, don't panic! You can always get the audit reconsidered for re-opening.
• Feel free to bring a tape recorder to the audit. It is legal for you to do so. Video taping is not allowed.
• This information is not meant that you should not have representation. On the contrary, it is always more helpful to have the original taxpayer administer the audit on your behalf, or hire an audit specialist.

[trvlarrngr]

on 7/27/2009 Great Info on surviving a tax audit. thanks. 5 stars