IRS Tax Audit Tips
During your audit, the examiner will take note of not only the documentation supporting your tax return but also your behavior. They will be looking for clues of any possible wrongdoing or intent to evade taxes. IRS examiners are specially trained for these circumstances and have various techniques to identify underreporting of tax liability. Of course, the best way to handle an IRS audit is to retain an audit defense attorney. An experienced tax attorney can help you comply with the audit and address any assessed interest and penalties.
1) Establish Good Rapport with the Auditor
Establishing a good rapport with the IRS examiner can be helpful. This doesn’t mean that you have to treat them as a friend. However, you shouldn’t behave as if the IRS examiner is the enemy, at least for the duration of your meeting. People who take a hostile attitude with the IRS examiner may come to regret it later. An IRS examiner will be more likely to allow deductions and allowances if they don’t feel like you’re rude to them.
A good way of doing this is to start with a friendly approach. You don’t have to be overly friendly, but acting professional and courteous can help you establish a good rapport with the examiner.
2) Don’t Disclose Too Much Information
That being said, there’s no need to reveal your entire life story to the IRS examiner. By sharing too much information with the examiner you might inadvertently disclose information that can be used against you. Understandably, audits are stressful, and some people respond to that stress by talking during periods of silence. As tempting as that may be, it’s important to avoid disclosing too much information. Ideally, you will have hired a tax attorney to represent you during the audit to limit the risk of disclosing too much information.
3) Don’t Offer Freebies
Don’t try to sweeten the deal by offering snacks or souvenirs to the IRS examiner. Most examiners won’t accept it, and your behavior might put them on alert. Don’t even think about offering them a bribe. A suggestion of an under-the-table transaction will cause your case to be referred to their criminal investigation division, and you’ll be in more trouble than you were earlier.
4) Difficult Auditors
You might receive an auditor who is hostile or otherwise unpleasant. If this is the case, you can try and ask the auditor politely to be more considerate. If this doesn’t work, say that you need to consult a tax lawyer and that you need a recess. Your request will be granted if you use this reason and the auditor might be in a better mood when you resume. If none of this works, you can ask to see their manager and request a different auditor.