Even if you do everything right in terms of preparing your taxes, you may find a letter from the IRS in your mailbox. First of all, don’t panic. A notice doesn’t necessarily mean that there’s something wrong with your tax return—the IRS may simply want more information on how it was prepared.
Here are some friendly tips to get you ready for such an occasion:
- Get ready for an IRS audit when you prepare your taxes. All your information is already in front of you, so it just makes sense to cover your bases here. Be sure that any questionable items are supported by memorandums or other documents from your tax advisor. One thing to remember, in general, is that the IRS doesn’t need to prove anything—by law that responsibility rests on you. You must be able to provide evidence that your deductions are valid and that you’ve paid the right amount.
- Organize your information. If the IRS has notified you of the documents you’ll need for the audit, make sure they are neatly organized so that you can pull them out or answer questions about them as quickly and efficiently as possible during your appointment. This will put you in better standing with the examiner.
- Dress as you normally would. It may sound silly, but some people believe that looking poor will allow them to plead poverty. This is not the case. Likewise, don’t wear expensive clothes or jewelry. This only makes you look like you make more money than the examiner.
- Be on time. This is incredibly important. If you can, be early, and here’s why: IRS examiners are reviewed for their efficiency, so keeping them waiting will start your appointment off completely on the wrong foot. Additionally, they start looking at your return about half an hour before the appointment, so being late gives them more time to find problems.
- Don’t volunteer information. Only answer the questions asked of you, and be concise. Bring only the documents requested, no more and no less. If the examiner asks you a question that doesn’t seem relevant, ask them why it is being asked. Above all, be careful what you say to an IRS agent, since the information can be used in court.
Check back next week for more tips on how to prepare for an IRS audit. For further information, please contact Ted Lanzaro at 203-922-1742 or ted@lanzarocpa.com.
Ted Lanzaro is the founder of Lanzaro CPA, LLC, a boutique tax consulting firm specializing in small businesses and the real estate and construction industries. For more information about CPA Ted Lanzaro, check out his website at www.lanzarocpa.com and www.taxcpact.com.
