Getting into trouble with the IRS can be daunting for any taxpayer. An audit is something that can give you a great deal of stress, even if you have done nothing to deserve one. It is important to understand that audit notices are not meant only for people who intentionally evade taxes. Something as minor as errors and numerical discrepancies can get you in trouble. Still, an IRS notice has to be dealt with properly to resolve things, whatever the reason for getting one may be. Being aware of the right way to handle things can make all the difference. Here are some effective tips you can follow to survive an audit.
Understand the reason
First things first, stay cool and don’t stress out because an audit in no way indicates suspicion of criminal activity. Since tax returns are complicated, you may come under the lens for simple reasons such as a spelling mistake or mathematical error. You may also face the issue because of claiming certain deductions that are not allowed. Further, income from a side hustle can also make you accountable. It is vital to identify the reason for the audit so that you can decide the right way to deal with it.
Prepare your paperwork
When you get an audit, your first intention should be to convince the authorities that you have reported correct income and claimed only legitimate deductions, credits, and exemptions. Verbal explanations are of no value in this context. Therefore, you must start preparing your paperwork because you will absolutely need to present documentary evidence to the authorities. Check all the documents and arrange for the reconstruction of the missed ones.
Collaborate with a lawyer
The most important thing to do for addressing an IRS notice is to collaborate with a seasoned tax attorney. The best way to find one is on a reputed network like taxattorneys.io, where you can find professionals with the right skills and expertise. Letting a lawyer to handle the case is a wise decision because they can decide what works in your favor and also work out on an appeal if they deem necessary.
Avoid answering unless asked
Your lawyer will have one piece of advice for you- don’t give information unless asked. Do not provide the authorities any documents and copies of your accounts and returns of the previous years unless the audit notice specifically asks for them. Since a lack of awareness can land you in trouble while you meet the authorities, it is best to let your lawyer represent you.
Research and know your rights
While tax audits definitely spell trouble for any taxpayer, you need not be terrified if you get one. Research legal issues and find out about your rights so that you can manage your expectations related to a tax audit accordingly. Your lawyer can also offer assistance in this context, which is another valid reason to onboard one for handling your case.
Tax audits are hard to deal with but taking the right approach can make all the difference. While you can approach the authorities for negotiations, there is also the option to file an appeal if you think that you are on the right side of the tax laws.
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