by Charlotte Wood
(last updated February 21, 2009)
The word "audit" usually inspires some degree of fear or trepidation within its victims. Just about everything can be audited: banks, universities, companies, and individuals. An audit is really just a check up to make sure everything you're doing is kosher and if you've been keeping up with your taxes and such then you shouldn't have anything to worry about and even if your files are a bit questionable, you can still tidy them up and pass!
When you get your audit notice, don't ignore it. That may be obvious, but sometimes those things are easy forget (whether that be intentionally or not). A tax audit really isn't a big deal and all they're looking for is to see if you've filed your taxes correctly and to see where you might have missed something (that can be money you owe them or money they owe you—it goes both ways fortunately).
You have some time between when you receive the notice and when the audit actually occurs, so take advantage of that time and clean up your files. Usually something will have triggered your audit; the selection process does look for tax "red flags" and if you fall under that category you can be tagged for an audit. Also, if your income rises significantly or if you are self employed you could be in line for a tax audit.
You should seek the assistance of a tax professional. Have them look over your accounts and files to make sure you didn't miss anything and help you correct what you do need to fix. It's like when you write a paper; you should have someone else look at it because they can spot things you missed. A professional knows what they're doing and can help you make the best of your tax files. When meeting with the auditor, do it away from your home or office and go to the IRS offices. Keep your conversation professional and to the point, staying honest and straightforward.
If you've already received your notice, there might not be much you can do now, but if you want to cover your bases in the event you do get flagged for an audit, make sure you keep all your paperwork—forms, pay stubs, receipts, etc. Something good about audits is that you know right away how you did. If you win then the IRS representative will go on his way, but if you lose then you'll either have to pay the money straight up or you can take it to appeals if you feel the audit was unfair in any way.
Tax audits really aren't so scary, especially if you've already been following the letter of tax law and keeping up with your paperwork. You can fix any problems you have—big or small—with some work and you have every ability to pass that audit with flying colors!
The people receiving the inheritance pay an inheritance tax. Each beneficiary is responsible for paying his or her own ...Discover More
Taxes are a pain and especially when you end up doing them last minute. But how do you know if you're doing them last ...Discover More
If there is one thing that just about anyone can agree too, it is that time has a tendency to get away from us. This ...Discover More