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:
Don’t overshare. Never send in more information than is requested. Send what the IRS requests. Period.
A CPA can help.
Taxpayers can certainly attempt to navigate an IRS audit on their own, but now may be the time to call on a CPA for help. “Undergoing an IRS audit can be stressful,” says Blaine Peterson, CPA, JD, shareholder at DeBee Gilchrist PC and chairperson of the OSCPA Taxation Committee. “A CPA can help guide you through the process, ensure you’re meeting all of your legal obligations, and even act as your representative to meet with the IRS examiner. The important thing is to call for help before you get in over your head.”