IRS Audit - The ProcessThe Internal Revenue Service is authorized to do an audit of any taxpayer. If you are to be audited by the IRS, keep in mind that an IRS Audit is nothing more than an analysis of your assets and liabilities, just like your company is audited. An IRS Audit does not mean that you have done something wrong in your tax-filing procedure, rather the IRS Audit is in itself the test to ensure that the information you provide in your tax returns is accurate. While it is not required of the IRS to prove something as incorrect, in most cases, the IRS is able to prove something or the other even if it is as low as $100. So when you get information about a looming IRS Audit, you must see to it that what the auditor perceives is what you have declared in the return. It is recommended that you hire a taxation professional in order to start audit preparations, so that you have all the documentation, etc., ready with you when the auditor comes to visit you. After July 22, 1998, the IRS has to carry the burden of proof to satisfy any accusations it has made against any taxpayer. In most circumstances, the IRS Audit takes place in either of two ways. It is the first duty of the IRS to use computerized records, so as to identify all the tax returns, which do not carry tax form 1099s or W-2 income particulars, in comparison with the information, which has been served to the IRS by the assessees employers, as well as by companies that hire independent contractors. You must also consider that the IRS also accepts information from other sources such as publicly accessible records and previous returns. The IRS uses all information that it deems as accurate in order to decide whom to audit.
Thankfully, the IRS Audit takes place in person, and if you are comfortable with it, the IRS Audit is also done via correspondence. IRS uses the term 'Examinations' to signify audit. For those who face a correspondence-based IRS Audit, the IRS will send a letter to ask for more information in addition to what you have already provided. You have the option to continue to abide by the correspondence audit or you can seek a personal IRS Audit so as to understand the process used. You are also given the option to seek the opinion of the examiner's (auditor's) supervisor. Remember that the IRS is bound to tell you about the appeals process. If you are not satisfied with the examiner as well as his supervisor, you can move to IRS appeals. If you are still not satisfied, you can always move to the federal courts against the IRS Audit. |