How to Talk to the IRS During an Audit

An IRS audit notice is enough to ruin anyone’s day. If your business gets flagged, your first thought is probably… Oh no, what did I do wrong, and how much is this going to cost?

Audits aren’t solely about catching mistakes. Often, it’s simply the IRS double-checking things that might seem a bit off. Still, it’s important to approach this carefully.

Below, we outline what happens during an audit, how you can prepare, and the dos and don’ts to keep in mind.

Why You Got Picked

Audits can occur for a variety of reasons. Perhaps your income didn’t quite match what third parties reported, or your expenses seemed unusually high. Sometimes, though, it’s simply a matter of being randomly chosen, which does actually happen!

The Internal Revenue Service (IRS) conducts various types of audits. A correspondence audit is conducted via mail and typically concentrates on a single issue.

An office audit necessitates your presence at an IRS office, where you must bring relevant documentation. A field audit involves IRS officials visiting your business or residence. The seriousness of this type of audit cannot be overstated.

Don’t Panic, But Don’t Ignore It

Regardless of the type of audit you are undergoing, the fundamental principle is to provide a response. The notice will specify the scope of the examination and the deadline for your reply.

Missing that deadline could mean the IRS might disallow your deductions, suggest penalties, or even send you a bill without giving you a chance to explain your side.

Gather Your Records

The IRS will ask for documentation to support the items they’re reviewing, such as receipts, invoices, payroll reports, or bank statements. Keep things organized. Provide exactly what they request, no more, no less.

Avoid offering extra documents or explanations unless they directly answer the question. Oversharing can open the door to more scrutiny.

Should You Handle It Alone?

If the audit is straightforward and you’re confident in your paperwork, you may be able to handle it yourself. But if the IRS is challenging major deductions, looking at multiple years, or asking complicated questions, get help.

A tax attorney or experienced IRS representative can help you handle the auditor, safeguard your rights, and ensure everything stays on track.

Know Your Rights

You have the right to understand what the IRS is doing, to be treated professionally, and to appeal any decision you don’t agree with. If the audit ends with a result you don’t like, you can ask for a meeting with a supervisor or file a formal appeal.

Ready To Talk To Someone?

An audit may not be an enjoyable experience, but it is not catastrophic. Maintain composure, remain organized, and understand that you are not required to confront it independently.

If you’ve received an audit notice or just have a feeling that something’s coming up, don’t hesitate to give us a call. We’re here to review your situation, handle the communications with the IRS, and help you protect both your business and your peace of mind.

Send us a message to get started!