Being Audited? 3 Steps You Need To Take
No one files their taxes each year and hopes to be audited. It is one of those things that everyone dreads and hopes that they never have to deal with. However, in the event that you get that notice in the mail that you are being audited, it can be extremely overwhelming. Luckily, the process itself isn't quite as stress-inducing as it may seem. It is important that you do seek out professional help from a tax service, but it's just as important that you are prepared for an audit. Here are three steps to dealing with a tax audit.
Examine the IRS Audit Notice Thoroughly
It is well-known that IRS notices are complex, long, and hard to understand. These notices tend to be abundant in details, and as a general rule, they have a list of instructions with them that can serve as a guide throughout the auditing process. Once the initial auditing notice has been received, make sure to sit down with the paperwork and review it thoroughly. If there is anything that is unclear or you don't understand, talk to a CPA immediately for tax assistance.
Gather Necessary Information
Once you have thoroughly read through the notice, gather together all of the information and documents that have been requested. If the IRS is questioning deductions that you have claimed, then you will need to prove their validity through receipts or other documentation. In some cases, you may be asked by the IRS to supply your previous year tax returns or income documents. To ensure you are able to easily find your tax-related documents, make sure you keep them together in one secure location.
Respond in a Timely Fashion
It is imperative that you respond to the IRS after receiving the initial notice as soon as possible. The sooner that you officially respond to the IRS, the sooner that you can eliminate the stress that you are experiencing. In addition, your fast response will reduce the number of penalties and fines that you may face. In the event that you need additional time to obtain all of the information that the IRS needs, you can ask for an extension. In most cases, you can get an extension of 30 days, allowing you to work with a professional tax service in your area.
When you receive a tax audit letter in the mail, don't assume you have to handle everything on your own. Talk to a local tax service like Balkcom Pearsall & Parrish CPA's PA for help.