I'm being audited by the IRS! Now what?

jscalona
by jscalona

 

It may literally be the worst feeling in the world. You get a letter from the IRS that you’re being audited! Immediately, you start to panic. Now what in the world do I do? Is my life over?

It’s time to settle down. Your life is in fact not over. Although the auditing process can be a little bit of a pain in the neck, it probably won’t be worth going crazy over. Let’s take a look at some thing you need to do to prepare yourself.

Get everything in order

The IRS should let you know exactly why you’re getting audited. It could be because you left off some information or totally botched the calculations on your form. Or it could simply be because they chose you at random. Yes, the IRS does this! Whatever the case, you now have time to get all the info together that you need to fix the situation. Take the time you have to collect absolutely everything you could ever possibly need. Find all your receipts and your copies of W2s. Don’t assume the IRS has all your info already. In fact, assume they have absolutely nothing! Also, and this is just as important, have all this info in order. Don’t dump a box of receipts on your IRS auditor’s desk. Have all of them neatly filed and sub-filed. This way, the audit will take less time, and the probability of a problem arising shrinks.

Hire a lawyer

If things are bad enough and you possibly face thousands of dollars of fines, hire legal representation or an attorney to go to bat for you. They will (hopefully) have a better understanding of all that occurs and can also help you when confusing paperwork comes up. If you don’t feel the need to bring in an accountant or lawyer, consider consulting one ahead of your audit date. They may bring up several points you didn’t consider. This way, you can go into the meeting with a clear plan instead of getting surprised at the last minute.

Only sign when you're sure

Under no circumstance are you required to sign something when you have no idea what it says. If the IRS paperwork you’re looking at looks like Pig Latin to you, ask questions. This is no time to feel shame. Signing something you don’t know understand could possibly mean considerably higher fines and penalties!