A Better Understanding Of
The IRS Tax Audits
To Face It With Confidence!
The Internal Revenue Service, shortly known as IRS audit, is nothing but a review of an individual’s or an organization’s financial information, to see if all the financial transactions are reported exactly. It is good to know all about the IRS tax audits so that you get yourself prepared if your account is selected for the audit.
If an individual or a company is selected for an audit, it does not always mean that there has been some mistake in the returns. The choice is based on various methods. If the documents do not match the reported information, then the return of that particular taxpayer is selected for review.
The return of a person is targeted for tax audit if that particular account has some transactions with the account holders whose returns have been selected for audit. And the choice is also random. You will be informed by the IRS by mail or telephone if your account is selected for the audit. The audit is conducted either through mail or in person and the records of the taxpayers are reviewed.
You will be informed by the IRS as to the requirements of the records for the audit. The interview may be either at the taxpayer’s place of business or home, or at the office of the accountant or at the IRS office. The modifications in the return will be explained if any.
In this interview, you will be instructed as to what records or reports you should bring for review. After your returns have been audited, you will be explained the corrections that should be made.
It is necessary to know all about the IRS tax audits to claim your rights at the time of the audit. You have the right to know why the IRS needs some information and how that will be used. You can clarify about the confidentiality of your tax matters. You have the right for a fair treatment and you can have representation from an authorized professional.
You have the right to appeal if you have any disagreement with the audit reports. The time taken varies for each audit. Availability of the needed information, the availability of both the auditors and the account holders selected for audit for the interview, and the changes in the audit report are some of the factors that have impact on the length of the audit of an account.
As the IRS selects your account for audit, you will be sent a written request specifying the documents to be produced at the time of audit. You are expected to retain the records to substantiate the records in your return. Electronic records are also accepted by the IRS. If your account is audited it does not always mean that there should be modifications in your return.
It may end without the need for changes, or there could be proposed changes agreeable to the taxpayers and there can be the cases in which the changes are understandable but not agreed by the taxpayer.
You need to sign the report and pay the amount due if you agree with the audit findings. If you disagree with the audit findings, you have the right to appeal for the same. Know all about the IRS tax audits will help you understand the IRS and face the audit without the need for fear.
Know all about IRS Tax Audits