What should I do if I receive an IRS audit letter?
Don't ignore it! Email, fax, or bring it in to me right away so we can see exactly what the IRS wants to talk about.
Should I call the IRS?
No! When you're being audited, it's important to know the rules. Tax auditors use special language. Common words can mean something different when talking about taxes. You need a professional on your side who knows why the IRS is asking those questions and the important words to include in the answer. I will deal with the IRS for you. You should never talk to an IRS agent.
Burlingame - San Mateo - Foster City CPA Since '88
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What's the next step?
When you bring in the audit notice, I will see which auditor has been assigned your case. I will call him/her and see if the audit can be handled by mail. If not, I will make an appointment to meet, either at the IRS' office or mine. The appointment will be far enough in the future to give us the time we need to pull together the necessary information.
After that?
We will work together to assemble the information that I will present to the IRS. We will arrange the information so that it fits the IRS agent's expectations as much as possible. When I'm preparing a tax return, I let people give me information in whatever format they want. But when we are responding to an audit, we want to give the auditor something that looks complete, is easy to understand, and fits the recommended format.
And finally...
I will meet with the IRS agent and present the data. I will have tried to anticipate all of his questions so that everything can be handled in one meeting. If I'm successful, I will leave that meeting with either a "no change letter" or a short list of additional documentation needed before the "no change" can be issued. That is the typical outcome of my meetings with the IRS.
Sometimes, as a result of the audit, the IRS proposes changes to the tax return. If that happens, I will discuss them with you. If you agree with the changes and need additional time to pay the tax, I will help you set up a payment plan. If we do not agree with the changes, I will prepare your audit appeal. Don't worry, there are many layers to the IRS. If you have a reason for believing the changes are incorrect, we can talk to someone else at the IRS.
The Bottom Line
Having an expert CPA on your side significantly raises the odds of your getting the best outcome on your audit. Outstanding representation can not only help save your sanity, it can actually save you money!
What if I tried to handle my own audit and now it's a mess?
This happens all the time. Bring all of your paperwork in and let's discuss it. We may be able to re-open the audit. In any case, there are still actions we can take to minimize the tax, reduce penalties, release liens and levies, and set up payment plans.
If you have questions / concerns, or are ready to enlist the tax services of an experienced CPA, please contact me.
January, 2012
