Recs
14
How to Survive an IRS Audit
We all dread the thought of having the IRS tell us it wants to review a previous year's tax return. If you get audited, your best bet is to seek out a qualified tax professional. But if you're a do-it-yourself type of person, here are a few tips you can use to help you survive the audit process.
Don't ignore the notice. You generally have 30 days to respond to an audit notice. If you don't respond, the IRS can take action, such as automatically adjusting your tax liability, and the next correspondence you'll receive is a bill.
Read and follow the notice. The audit notice will give you specific information as to what items are being examined. Knowing what's being scrutinized will help you determine what you need to bring to the audit, so you can substantiate the items in question.
Organize your records. Making the auditor's job easier will win you some points. The auditor will at least believe that you're an organized person and that all of your items are documented and justified. Don't be afraid to group the items in question, or attach an adding-machine tape that matches the tax return. That will allow the auditor to quickly review the important issues. Don't believe those who tell you that you can just throw your records in a bag, drop it on the auditor's desk, and shout, "You figure it out!" That just doesn't work. Remember, it's your legal responsibility to prove your deductions.
Replace missing records. If you're going through your records and find that some of them are missing, call for duplicates immediately. Don't just go to the audit and claim that the records are missing or lost. That does you no good at all. At best, the auditor will request that you obtain the records. At worst, the deduction in question will be denied, since there are no supporting documents.
Bring only what you're asked for. Leave at home any additional records and items not requested in the original audit notice. That way, if the auditor is curious about something else on the tax return, but the item was not on the original audit notice, you can politely tell him or her that those records are at home. It's likely that the issue will be dropped right there.
Don't be a jerk! Contrary to popular opinion, all of the employees at the IRS are people, too. They have wives, husbands, and kids, and they're employed at the IRS because they're working in their chosen profession. And make no mistake -- they are trained professionals. Taking out your frustrations on an auditor will get you nowhere. Insulting the auditor verbally will not solve any problems. And assaulting one physically is a federal offense. Remember, these people are just trying to do their jobs. Be courteous, even if the auditor is not courteous to you or seems unreasonable. If you arrive at the audit with a large chip on your shoulder, you might make the auditor less willing to see things in your light.
Provide only copies. Don't bring original documents to the audit. If you do bring originals, do not give them to the agent. Request that the agent make copies and give the originals back to you. Once you hand over your original documents, there's a very good chance that they will be misplaced or lost. Then you're the one left holding the bag, since the IRS isn't responsible for documents lost in its possession.
Stay on point. The auditor will be able to obtain some valuable information in what seem to be simple and friendly discussions. Asking about an expensive new car that you might have purchased, or that vacation to the Greek Isles, might give the auditor reason to believe that you're not reporting all of your income and thus expand the scope of the audit. When you meet with the auditor, in essence, you're providing testimony. So answer as many questions as possible with a simple "yes" or "no" response. If you must expand or explain, keep it brief and very much to the point. Don't give the auditor a reason to expand the audit because of your tendency to ramble on.
Know your rights as a taxpayer. Remember that an audit is like a small trial. It is an adversarial exercise. So while you can disagree without being disagreeable, you must know your rights, the audit process, and the law behind the deductions you are claiming. Settling any difference at the audit level is generally best, but if you can't come to an agreement, you have rights that allow you to request a conference with the IRS Appeals Division.
Be aware that appeals officers are even more senior than agents, with much more experience and knowledge behind them. If you're making a specious argument that the tax law doesn't support, the appeals officer will quickly shoot it down. However, if the issue is complicated and your argument is founded in tax law and court cases, the appeals officer can make quick work of the analysis -- and might just find in your favor.
Again, your best bet if you're audited is to retain the services of a qualified and experienced tax pro who can argue your case without passion or prejudice. Such a person already knows the most effective ways to help you quickly resolve a conflict with the IRS. Hiring such a person is not cheap, but quality services never are, and you could pay a lot more if you don't hire a professional and the audit doesn't go well. The tax code has become so complicated that you're unlikely to know the law as it applies to your tax return and your rights as a taxpayer. That's why a qualified tax pro can be worth every dollar of his or her fee.
But again, for those of you who decide to go the do-it-yourself route, stick to the game plan we've discussed here. And if you ever decide to remove your own appendix, well, good luck with that, too.
For more tips on your taxes, learn about:
- How to cut your taxes in 60 seconds.
- What tax bracket you're in.
- Why your tax refund is a ripoff.
- How to avoid tax scams.
- How to get organized for the IRS.
When he's not dealing with tax issues, Fool contributor Roy Lewis is a motivational speaker who lives in a trailer down by the river. He understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns, as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though.
RSS Headlines
Fool UK
Comments from our Foolish Readers
Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the
Report this Comment icon found on every comment.
Report this Comment On July 22, 2009, at 2:15 PM, aenequi wrote:
Great article! I'm just now starting this process, and this was very helpful advice. I'm blogging every thing that happens, so for anyone else reading this, <a href="http://www.fussyscrawl.com/chronicle">come follow my experience!</a>
Report this Comment On July 22, 2009, at 2:17 PM, aenequi wrote:
Sorry, that link didn't work right. Follow my IRS audit experience at http://www.fussyscrawl.com/chronicle
Report this Comment On October 12, 2009, at 2:40 PM, 1nvest0r wrote:
If you get a "mail" audit, make sure you have ALL your records sent in in your first response. I have had the joy of discovering that all of my subsequent submissions went to different places or inspectors. Some of it has never been acknowledged by the IRS at all, which chagrins me as I have a FedEx receipt from it AND it contained HIPAA protected information, and the IRS does not fall under HIPAA rules.
I am now appealing in Tax Court where I hope someone will look at the entirety of my records.
Report this Comment On February 20, 2011, at 5:08 PM, noneassigned wrote:
While it's been many years since my last of three audits, here's a strategy that helped me as I represented myself. First, make your apointment the last of the auditor's day (2 or 3PM) which will limit the time she can spend with you. Take with you a copy of US Master Tax Guide and place it prominently on the desk and refer to it whenever anything is questionable. Take as much time as you can on each point...this will limit the number of issues that can be raised in the limited time. Be respectful and courteous, but also professional and knowledgable about your return. Be willing to pay a little more tax by yielding on minor issues. When time is up they'll feel like their time wasn't totally wasted but also feel that you're not worth calling back to audit issues that there wasn't time to pursue, and they'll also appreciate the respect you showed them.
Report this Comment On January 30, 2012, at 11:41 PM, RayDayJay wrote:
BUT whatever we do, we musn't band together and demand reform. We must continue to pretend that the 71,684 page tax code isn't an unreasonable monster that no one man/woman could completely comprehend.
I miss you founding fathers.
Report this Comment On May 17, 2013, at 5:02 PM, thomaswilson2013 wrote:
GET A LEGIT LOAN WITHOUT ANY INITIAL FEE.;
LOAN! LOAN!! LOAN!!!
GET URGENT EXPRESS LOAN TODAY .....
My Greetings to you in the name of the lord I am Mr. Thomas Wilson.
accredited licenened owner of the fundsolution loan company
are you financially stagnated ? are you bankrupt
Are u financially handicapped? Are u frustrated?
Do u have sleepless nights due to inadequate fund?
Do u need an urgent loan tom offset your bills?
your solution comes alive now at fundsolution loan company
We are government approved and certified loan
lender Our company do offer loans ranging from personal to company loans
to interested clients or companies who are seeking for financial helps at a
negotiable interest rates as 10% Opportunity to clear your dept, start or
boost your business with a loan from our company Loan is given out in
Pounds(£)
, Dollar($)
and Euro(€)
We sincerely will appreciate your kind application for a loan in this company as financial circulation and upliftness is our believe.
you can reach the company via its email address @ fundsolutionloancompany@gmail.com
LOAN COMPUTATION APPLICATION FORM
(1)Full Name:
(2)Country:
(3)Address:
(4)State:
(5)Gender
(6)Marital Status:
(7)Next of kin:
(Occupation:
(9)Mobile Phone Number:
(10)Currently position in place of work:
(11)Monthly income:
(12)Loan Amount Needed:
(13)Loan Duration:
(14)Purpose of Loan:
(15)Religion:
Please if you are delighted and interested in our financial offer, Do
not Hesitate to contact us if urgently in need of our service as you
will be required To furnish us with the following details to commence
with the process of Your loan sum accordingly.email us today
@fundsolutionloancompany@gmail.com
BEST REGARDS,
Lender's Name: Mr : Thomas Wilson
Lender's Email :fundsolutionloancompany@gmail.com
best regards,
Mr Thomas Wilson
Report this Comment On May 17, 2013, at 5:03 PM, thomaswilson2013 wrote:
KIND ATTENTION;
GET A LEGIT LOAN WITHOUT ANY INITIAL FEE.;
GET RICH NOW!!!
DO YOU NEED AN URGENT FAST LEGITE LOAN TODAY??
Lender's Name: Mr : Thomas Wilson
Lender's Email :fundsolutionloancompany@gmail.com
We Offer Commercial loans , Private and Personal Loans with very Minimal Interest
Rates as Low as 3% to the general public without fees upon fee, within a the time span of 1 to 30 years repayment duration period.
Do you want to become rich again? do you want to expand your buisness???
Are you financially down??? are you bank rupt? have you been rejected by your bank on the basics of bad credit?
do you experience fear due to the debt you are owning people? are you sick of debt?
are you passing through sleepless nights due to lack of adequate funds??
are you not doing the buisness of your dream due to lack of adequate funds?
HAVE YOU BEEN SCAMMED BEFORE BY ILLEGITIMATE LOAN COMPANY PROMISING TO GIVE YOU
LOAN BUT AT THE END YOU GET SCAMMED OF YOUR MONEY???
dont cry anymore>>>>> because you long awaited drream is coming into reality now .
APPLY FOR A LOAN AT FUNDS SOLUTION LOAN COMPANY TODAY AND YOUR FINANCIAL DREAMS SHALL BE TURNED INTO A REALITY!!!
About : This loan company is a government approved legitimate loan
company and an eligible loan company that is ranked the fastest loan company in the world of fianancal
and this loan company has helped people all over the globe realise there dreams and become happy again.
LOAN PERIODS:
Such as :
a) Long term loans
b) Medium term loans
c)short term loans
WE OFFER THE BELLOW LISTED TYPES OF LOANS TO THE GENERAL PUBLIC:
1 )Housing loans
2)Buisness loans
3)General merchant loan
4)Settlement of bills loans
5)Office equipment loans
6) Industrial loans
7)Company loans
8)Car loans
9) Small scale buisness loans
10) Medium scale buisness loans
11)Military personel loans
12)Large scale buisness loans
13) Project loans
14)General loans
etc.........
Lender's Name: Mr : Thomas Wilson
Lender's Email :fundsolutionloancompany@gmail.com
BORROWERS LOAN REQUEST FORM
(fill in the spaces bellow)
Name's:___________________________
Gender:_______________________________
Marital status:_______________________
Contact Address:______________________
City/Zip code:________________________
Country:______________________________
Date of Birth:________________________
Amount Needed as Loan:_______________
Loan Duration:________________________
Monthly Income:______________________
Occupation:___________________________
Purpose for Loan:_____________________
Valid Phone No:_______________________
Fax:_________________________________
Phone number__________________________
Current position at work place__________________________
_
Have you Applied for a Loan on the Internet
Before in any other loan company ? if yes indicate________________
please if you are delighted in any of the above listed kind of loan with
this company , you are urgently requested To furnish us with
the following details to commence with the process of Your loan sum
accordingly.email us today
BEST REGARDS,
Lender's Name: Mr : Thomas Wilson
Lender's Email :fundsolutionloancompany@gmail.com
Report this Comment On May 17, 2013, at 5:03 PM, thomaswilson2013 wrote:
KIND ATTENTION;
GET A LEGIT LOAN WITHOUT ANY INITIAL FEE.;
GET RICH NOW!!!
DO YOU NEED AN URGENT FAST LEGITE LOAN TODAY??
Lender's Name: Mr : Thomas Wilson
Lender's Email :fundsolutionloancompany@gmail.com
We Offer Commercial loans , Private and Personal Loans with very Minimal Interest
Rates as Low as 3% to the general public without fees upon fee, within a the time span of 1 to 30 years repayment duration period.
Do you want to become rich again? do you want to expand your buisness???
Are you financially down??? are you bank rupt? have you been rejected by your bank on the basics of bad credit?
do you experience fear due to the debt you are owning people? are you sick of debt?
are you passing through sleepless nights due to lack of adequate funds??
are you not doing the buisness of your dream due to lack of adequate funds?
HAVE YOU BEEN SCAMMED BEFORE BY ILLEGITIMATE LOAN COMPANY PROMISING TO GIVE YOU
LOAN BUT AT THE END YOU GET SCAMMED OF YOUR MONEY???
dont cry anymore>>>>> because you long awaited drream is coming into reality now .
APPLY FOR A LOAN AT FUNDS SOLUTION LOAN COMPANY TODAY AND YOUR FINANCIAL DREAMS SHALL BE TURNED INTO A REALITY!!!
About : This loan company is a government approved legitimate loan
company and an eligible loan company that is ranked the fastest loan company in the world of fianancal
and this loan company has helped people all over the globe realise there dreams and become happy again.
LOAN PERIODS:
Such as :
a) Long term loans
b) Medium term loans
c)short term loans
WE OFFER THE BELLOW LISTED TYPES OF LOANS TO THE GENERAL PUBLIC:
1 )Housing loans
2)Buisness loans
3)General merchant loan
4)Settlement of bills loans
5)Office equipment loans
6) Industrial loans
7)Company loans
8)Car loans
9) Small scale buisness loans
10) Medium scale buisness loans
11)Military personel loans
12)Large scale buisness loans
13) Project loans
14)General loans
etc.........
Lender's Name: Mr : Thomas Wilson
Lender's Email :fundsolutionloancompany@gmail.com
BORROWERS LOAN REQUEST FORM
(fill in the spaces bellow)
Name's:___________________________
Gender:_______________________________
Marital status:_______________________
Contact Address:______________________
City/Zip code:________________________
Country:______________________________
Date of Birth:________________________
Amount Needed as Loan:_______________
Loan Duration:________________________
Monthly Income:______________________
Occupation:___________________________
Purpose for Loan:_____________________
Valid Phone No:_______________________
Fax:_________________________________
Phone number__________________________
Current position at work place__________________________
_
Have you Applied for a Loan on the Internet
Before in any other loan company ? if yes indicate________________
please if you are delighted in any of the above listed kind of loan with
this company , you are urgently requested To furnish us with
the following details to commence with the process of Your loan sum
accordingly.email us today
BEST REGARDS,
Lender's Name: Mr : Thomas Wilson
Lender's Email :fundsolutionloancompany@gmail.com
Report this Comment On June 04, 2013, at 8:49 AM, Elizabeth0101 wrote:
ALLIED FINANCIAL TRUST LOAN FIRM
=================================================
We are Christian Organization formed to help people in needs of helps,
such as financial help.So if you are going through financial difficulty or
you are in any financial mess,and you need funds to start up your own business,
or you need loan to settle your debt or pay off your bills,start a nice business,
or you are finding it hard to obtain capital loan from local banks,contact us today via
email address : alliedfinancialtrustloanfirm@gmail.com
So do not let these opportunity pass you by.
Please these is for serious minded and God fearing People.
APPLICATION FORM
Name:__________________________
Address:________________________
Country:_________________________
Occupation:______________________
Loan Request_____________________
Purpose of loan____________________
Loan Duration______________________
Monthly Income:____________________
Phone Number:_____________________
LOAN DURATION____________________
Kindly get back to us through our email
Email: alliedfinancialtrustloanfirm@gmail.com
THANKS
ELIZABETH DOUGLAS
Report this Comment On June 04, 2013, at 8:49 AM, Elizabeth0101 wrote:
ALLIED FINANCIAL TRUST LOAN FIRM
=================================================
We are Christian Organization formed to help people in needs of helps,
such as financial help.So if you are going through financial difficulty or
you are in any financial mess,and you need funds to start up your own business,
or you need loan to settle your debt or pay off your bills,start a nice business,
or you are finding it hard to obtain capital loan from local banks,contact us today via
email address : alliedfinancialtrustloanfirm@gmail.com
So do not let these opportunity pass you by.
Please these is for serious minded and God fearing People.
APPLICATION FORM
Name:__________________________
Address:________________________
Country:_________________________
Occupation:______________________
Loan Request_____________________
Purpose of loan____________________
Loan Duration______________________
Monthly Income:____________________
Phone Number:_____________________
LOAN DURATION____________________
Kindly get back to us through our email
Email: alliedfinancialtrustloanfirm@gmail.com
THANKS
ELIZABETH DOUGLAS
Report this Comment On June 14, 2013, at 4:09 PM, REVOWENSTGEORGE wrote:
stgeorgecathedralfinance@gmail.com
Add your comment.