No one wants to being audited by the IRS. In fact, when someone finds out they’ve been selected for audit, they usually fear the worst, even when they’ve done nothing wrong.
However, an audit is simply a process to make sure everything is okay with the numbers.
If you’re being audited by the IRS for the first time, here are a few things you need to know.
What You Must Provide During the Audit
When you’re being audited, the IRS will request that you provide specific documentation. You’ll be sent an email of what you need to provide.
There are some mandatory documents that must be provided such as:
– Legal papers such as custody agreements and divorce settlements
– Medical records
– Employment documents
Other documentation can include lottery tickets, travel tickets and loan agreements. Regardless of what the IRS has you provide, make sure to organize them to keep things simple.
How The Audit is Done
There are two ways an audit is conducted; through email or an in-person interview. If you’re told to come in for an interview, it’ll most likely take place at an IRS facility. In some cases, however, the interview can happen at your home, place of employment or at an accountant’s office. If the IRS wishes to audit you through email, they might ask you to provide additional documentation like your expenses, types of income and deductions.
How Long The Audit Will Take
One of the reasons why people dread audits is because they think it will take all day. However, this isn’t exactly the case.
The length of the audit actually varies on a few factors. It depends on what issues and how complex they are, what information you can provide the IRS with and whether or not you agree with the auditor’s findings.
Know Your Rights
As a taxpayer, you have rights when it comes to an audit. These rights include privacy about your taxes, wanting to know why the IRS wants the information, to appeal any disagreements and to be represented by yourself or a representative. Be sure to have a thorough understanding of your rights before the audit takes place.
Although audits can be irritating and a little frightening, it’s important to remember that the IRS is just doing its job. You only need to worry if there are any discrepancies on your tax returns or if you were dishonest with the government. Other than that, you have nothing to worry about.