For numerous taxpayers working and living in America today, among the worst fears is to be part of an audit by the Internal Revenue Service. Taxpayers usually have thoughts of levies, fines, penalties, and the mother of all punishments, being put in jail for tax issues. An IRS audit can even examine honest citizens who have always paid their taxes truthfully. When they receive their audit notice, even the most truthful people will begin questioning whether or not they truly did file their taxes correctly. This is usually the absolute most challenging and stressful moment in the life of any taxpayer. You need to understand before you worry, though, that a law safeguards taxpayers in an IRS audit.
The third installment of the Taxpayer Bill of Rights (TaBOR) was passed in 1998 after numerous Americans lobbied Congress regarding the abusive behavior of IRS auditors. With this bill, the IRS are required to truthfully advise taxpayers of their rights and what kind of action they can expect from the IRS.
While the audit is a process that is usually perceived by people as a regular meeting between the taxpayer and an auditor working for the IRS, this is typically not the situation. What happens more often is that a notice will be delivered to the taxpayer in the mail, requesting for clarification and additional documentation that strengthens or supports any of the claims in question which were filed on the tax return. If the taxpayer has kept considerably organized records, then most of these kinds of audits are often resolved in a quick manner.
The IRS can audit the whole or a portion of your tax return. Make sure that you just give documentation related to the portion being audited by the IRS. The IRS may request more documentation and examine closer if you provide more documentation than required.
Also, many people are not fit to deal with the IRS on their own. It is often a good idea to bring a CPA, a tax lawyer, or some other qualified tax advisor to any meeting with the IRS. Contact the actual professional who prepared your tax return if you utilized an accountant or tax service. They may know specific issues pertaining to your return and can assist in creating a response to the examiner with regards to your IRS issues.
You'll be told of the irregularities determined on your tax return as the audit ends. You will then be told of any financial adjustments, usually in the form of fines or debts, or, very uncommonly, refunds.