Surviving an IRS Audit

  • Objective. you must convince the IRS that you reported all of your income and were entitled to any credits, deductions, and exemptions that are questioned.
  • Request Audit Delay when possible. Postponing the audit usually works to your advantage. Request more time whenever you need it to get your records in order, or for any other reason.
  • Do not allow IRS to conduct the audit at your home or place of business. Keep the IRS from holding the audit at your business or home. Instead, go to the IRS or have YAHNIAN LAW CORPORATION handle it. Field audits (at your place) are used mainly when there is business income; consult YAHNIAN LAW CORPORATION before hosting a field audit. If you retain us, it is most likely that you will not even have to appear at the audit.
  • Record Preparation. If you are missing receipts or other documents, you are allowed to reconstruct records.
  • Manage your expectations. Don’t expect to come out of the audit without owing something. . Don’t try to compromise on the amount of taxes to be paid; instead, negotiate the tax issues with the auditor.
  • Don’t Elaborate on auditor questions. Give the auditor no more information than he is entitled to. Do not speak any more during the audit than is absolutely necessary. Don’t give copies of other years’ tax returns to the auditor. In fact, don’t bring to an audit any documents that do not pertain to the year under audit or were not specifically requested by the audit notice.
  • Research. Research tax legal issues by using free IRS publications and commercial tax guides. If you are still unclear about the tax law or how to present your documents to an auditor, consult YAHNIAN LAW CORPORATION before the audit. Better yet, have YAHNIAN LAW CORPORATION handle the audit for you.
    Know your rights. Review  IRS Publication 1, explaining the Taxpayers’ Bill of Rights, prior to your audit. If the audit is not going well, demand a recess to consult YAHNIAN LAW CORPORATION. Ask to speak to the auditor’s manager if you think the auditor is treating you unfairly. If the subject of tax fraud comes up during an audit, don’t try to handle it yourself. At that point, you most definitely need legal counsel. Don’t even talk to your accountant. There is no accountant client privilege for criminal tax matters.
  • Time is on your side. The IRS must complete an audit within three years of the time the tax return is filed, unless the IRS finds tax fraud or a significant underreporting of income.
  • Appeal the results. When you get the examination report, call the auditor if you don’t understand or agree with it. Meet with him or his  manager to see if you can reach a compromise. If you can’t live with an audit result, you may appeal within the IRS or go on to tax court.