Tax season comes every year and each year more people find themselves facing an IRS audit for back tax returns. This is a routine and common occurrence. In fact, audits can be triggered by a variety of things and therefore just about everyone is subject to being audited at one point or another. Though it is true that some tax returns raise more red flags compared to others, there are plenty of people who are simply selected at random for an audit. The prospect of having to verify and defend tax returns is a daunting task and one that is far out of the logical and professional range of typical tax payers.
Once notification has been received by a tax payer that they have been audited, the process tends to move rather quickly and the tax payer will be required to provide all information, supplemental documentation or receipts per the request. Each audit differs as the audit was triggered for various reasons and thus there is no one solution that fits all and that is where a trained and trusted professional becomes a huge help and asset to the tax payer.
IRS issues can involve questionable deductions, large deductions, big changes in expenses or income, large capital gains or losses or even retirement cash out issues. The various ways that a tax return can become compromised stems from the fact that many people calculate their own taxes and thus make errors, omissions or even inclusions that are not allowable based on current IRS tax law. The various ways in terms of how to deal with being audited start with recognizing that the audit will not simply go away and to start gathering all data and information as quickly as possible.
Once one has all information required, it is imperative to seek out a tax professional and have them review the audit notice, the full tax return in question and all information on hand to support all income and expenses listed on the return. It is at this point where the tax professional can help one get a plan together that will be highly helpful before the actual audit meeting takes place. This planning phase is crucial and will help those being audited to be as well prepared as possible before having to sit and meet with an IRS representative.