Few words in the English language set off alarm bells like the word "audit." The good news is there are ways to reduce the likelihood the Internal Revenue Service will tag you for an audit. Nevertheless, if a letter from the IRS does appear in your mailbox, don't panic.
Statistically, the IRS only audits about one percent of taxpayers with incomes under $200,000, according to the tax experts at the Oklahoma Society of Certified Public Accountants.
But what do you do if an audit is inevitable? Knowing what to do if the IRS does come calling can help put your mind at ease. Remember, you are entitled to ask why you are being audited. Stay calm, contact the IRS and respond to all requests from the agency in a timely fashion.
Here is a suggestion if you need to prepare for an audit:
Prepare a response. When the IRS sends you a letter, don't ignore it. Prepare a written response. If you need more time to gather information, ask for it.