How Should You Respond to a Notice of a Tax Audit?
There are few things as disconcerting as receiving the notice that the IRS will be conducting a tax audit on your return. Such a notice can be very upsetting and understandably so when it is totally unexpected. However, instead of panicking or believing the worst, it is important to remember that the IRS will often conduct random audits every year which mean that your filing may actually be fine.
Still, when you receive the notice, the first thing you will need to do is sit down and read it thoroughly. It may be that the notice is not an audit, but it may relate to something else entirely.
Stay Calm: While getting a notice from the IRS is never pleasant, it is also may not be the end of the world either. It may be that you only need to make a small correction to your tax return. However, it also may mean that you are being audited.
Respond: All notifications will have instructions for you that dictate how you should respond. There is usually a time period for response, a place to send the information or instructions about what to do. It is important that you provide a response within the time period that they designate which is normally 30 days.
In most cases, the response will not have you coming into direct contact with an IRS agent as it may be that they believe you owe more on your return or some adjustment that was not made on the return itself. Whatever the reason, you should look over your return to see if a mistake was made and then respond accordingly. In most cases, sending the money via check or money order where you can keep a receipt is good policy as you can use it later in case you get audited.
What if You Disagree with the IRS?
If you don’t agree with the notice, send a written reply that explains your disagreement and photocopies of any proof that you might have to back up your claim. It could very well be that the IRS will realize its mistake and withdraw the notification. However, it may also be that they will not agree with your explanation and pursue the matter further.
Remember that you should always be cooperative with information that the IRS is requesting about your tax returns and payments as they are entitled to all information that is legally within their realm. However, you can protest or appeal the audit once the conclusion is made.
To get a New York tax attorney by your side is recommended when you are being audited or pursued by the IRS. A tax attorney will defend your rights to the fullest and help organize your financial materials so that you can be fully prepared. Facing a tax audit is never a pleasant experience, so having the proper representation by your side is very important. Your tax attorney can help you get through this in a far better manner than facing the IRS alone.