Understanding an IRS Audit Notice in Three Easy Steps

Last week I wrote a post on the Tax Audit Defense blog, titled “Three Steps to Understanding an IRS Audit Notice” to help taxpayers understand an IRS audit notice even after panic mode has already set in. The post was inspired by an article written by my colleague, Eva Rosenberg, EA, national columnist and a teacher of tax law and representation aka TaxMama, titled “The Dreaded IRS Audit Notice.” In her article, Eva offers three practical steps that can help taxpayers facing an IRS audit more clearly and accurately understand the IRS correspondence they received. Here is an overview of the three simple steps to understanding the dreaded IRS Audit Notice:

Step 1. Read the audit notice, slowly. The notice will tell you the following information:

  • What year is under audit.
  • What forms or schedules IRS wants to examine (Example: Schedule A-Itemized).
  • The list of records or documents the IRS wants to see.
  • The date the audit is to take place.
  • Contact information (by mail or phone) for the person or group in charge of your audit.

Step 2. Figure out where the audit is taking placeand if you should change the location.

  • Will it be a mail-in or correspondence audit?
  • Is the audit an office audit to be conducted in an IRS office?
  • Is an IRS representative coming to your home or place of business for a field audit?

Step 3. Ask yourself if you can do this alone, or if you need expert tax representation?

Rosenberg recommends only in cases where just a few tax issues are being examined should taxpayers attempt to deal with the IRS on their own. Taxpayers facing field or office audits are urged to hire a qualified tax resolution specialist or tax attorney for expert guidance in the form of advice and hand-holding. She encourages those who need to see how the process works to read about their rights and watch a series of IRS informational videos about small business audits.

Receiving an IRS audit notice is a frightening experience that makes many want to run and hide. I like Eva’s strategy of better understanding the intimidating IRS correspondence. However, I place a heavy emphasis on hiring a qualified tax expert especially if facing an IRS field audit. Why? Small businesses and individuals are out of their league especially since the IRS has increased both tax audits and aggressive collection tactics. A seasoned tax professional with experience handling IRS tax audit cases understands the entire audit process and can devise a tax relief action plan on your behalf to resolve this major IRS tax problem for good.

More Tax Help, IRS News and Tax Relief Tips:

  1. Michael Rozbruch Interviewed in Opportunist Magazine
  2. Talking Tax Resolution with Fox 11 Tony Valdez
  3. IRS Offers Tax Help Tips-Worker Classification
  4. Tax Resolution After Receiving IRS Audit
  5. New Offer in Compromise Policies Bring Tax Relief

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