How to best prepare for a tax audit

income tax audit stamped on IRS form 1040

The last thing you want to receive in the mail is a notice of a tax audit from the IRS. The more you read, the more concerned you’ll become with your future.

While this is a scary time in your life, it doesn’t have to be. There are steps you can take to better understand the process, how to protect your legal rights and how to put the audit in the past in a quick and efficient manner.

Here are a few steps you should take as soon as you receive notice of an audit:

  • Contact a professional: Even if it seems that you can tackle the audit on your own, you’re best off consulting with a professional such as a tax attorney, CPA or enrolled agent. This person can represent you in the audit, which ensures that you don’t make any costly mistakes.
  • Review your records: Once you understand the reason for the audit, review your records to determine if the IRS is right or wrong. Sometimes this is easy, but it has the potential to be difficult if you don’t understand what they’re looking at. You never know what you’ll need, so get all your records together for the tax year in question.
  • Get in the right frame of mind: This is nothing to take lightly, as an audit could end up costing you a lot of money in the long run. Get serious about the audit, behave professionally and do whatever you can to move the process along in an efficient manner.
  • Don’t let the auditor trick you: This person doesn’t want to be your friend. They want to audit your return, find out if you did anything wrong and then ensure that you make things right. It’s okay to be friendly, but don’t let this fool you. Your auditor isn’t your friend.

These are just a few of the many steps you can take as you prepare for a tax audit. You may need to do other things based on the details of your specific situation.

Go into the process with a clear idea of what the IRS is looking for, as well as a plan for protecting your legal rights.

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