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Help, I'm Being Audited!
Tips for Surviving an IRS Audit By Deborah Ng
Tracy L. Coenen, a forensic accountant with Sequence, Inc., recommends gathering the necessary paperwork and calling in a professional. "Begin to gather the documentation that will support your income and expenses, and contact a tax professional who can assist you with the process," she says. "An audit is an adversarial process, and it is important to have someone on your side who can help you navigate through the system."
Nash also recommends having the tax professional do a "pre-audit" to simplify the process.
If you received notice of an audit, it's up to you to bear the burden of proof. When attending an audit, try to have the following in your possession:
- W-2s
- 1099s
- Bank statements
- Credit card statements/year-end summaries
- Real property closing statements
- Receipts for business expenses or related to improvements on your home
- Mileage logs/records
- Mortgage interest statements
- Receipts for meals and entertainment
Make sure all items are neatly organized, and bring only those applying to the year in question. You want to be able to find everything you're looking for at a glance. The last thing you want to do at an audit is fumble nervously through mounds of disorganized papers.
It's also recommended you keep the auditor's attention focused on the matter at hand. "Attempt to narrow the auditor's focus," Coenen suggests. "Ask specifically which items are being audited and provide only the documentation related to those items. Try to fully comply with the auditor's requests so that he or she does not expand the scope of the audit." Most audits focus only on one specific area of the tax return. The last thing you want to do is call attention to other areas.
