Dealing with a Tax Audit

[pennypinch]

The best way to deal with an audit by the IRS is to not have one at all! Typically only about 1% of all individual tax returns are audited. That number is slowly inching upward though.

The best ways to avoid having an audit are to make sure you have made no mistakes at all on your return. Make sure you have excellent records. Use a tax prep software which will do all of the math work for you as the math is the biggest made mistake. Also, typically large deductions with smaller incomes can trigger an audit.

If you are getting audited you will be contacted by telephone or through the mail. Keep all correspondence that you receive from the IRS and reply to them in a timely manner.

If a face to face meeting is needed be sure and take the tax preparer with you. Also many times it is a good idea to hire a tax attorney as well.

Don't ignore the IRS. They won't go away and it can only make things worse.

[Rae74]

Make sure that you file on time every year and include all of your income for the entire year leaving out none,if the irs catches you not filing one source of income they will fine you and what would have been a minimal fee would be increased to a higher fee.

This can throw a wrench in your plans when you least expect it if you are not careful.