by Rate Nerd on ratenerd.com
The IRS audited 11 percent more returns in 2010 over the year before, and more than double the agency’s pace just eight years earlier.
That’s almost 1.6 million individual taxpayers in 2010, and that pace may continue rising as the government works harder to collect every dollar it’s owed under the tax code.
If you get a letter from the IRS, don’t take it personally. “The government isn’t accusing you of dishonesty, it just wants to make sure your return is accurate,” says Walbert. To get through an audit as smoothly as possible, follow these common-sense rules.
1. Know your rights. Before your audit, read IRS Publication 1, “Your Rights as a Taxpayer.”
2. Be honest. Lying to the IRS can trigger heavy fines and even jail time.
3. Consider hiring help. You can be represented by an attorney who has experience in IRS audits and processes, a CPA or a federally authorized enrolled agent or tax practitioner.
4. Get organized. You’ll have more credibility if you can quickly answer questions and produce what’s asked of you. If you need time to get your act together, request a postponement.
5. Stick to the topic. Whether you’re answering a question or responding to a request for records, only give the IRS what it requests.
6. Take notes. Keep track of the examiner’s questions and your answers.
7. Be courteous. Don’t be hostile. If you think you’re being treated unfairly, share your feelings with the examiner’s supervisor.
8. Consider an appeal. If you disagree with the auditor’s findings, you might first try talking to a supervisor. You also can send a protest letter to the IRS Office of Appeals within 30 days of receiving the report.
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