Receiving an audit notice from the Internal Revenue Service is not something anyone would wish on their worst enemy but the reality is audits do happen and if you are knowledgeable and prepared, you can get through the audit and come out on the other side safely. The best way to start with tax audit defense is to understand your rights, dispel the myths, understand your appeal rights, and know help is available.
First, it is essential that you know you have rights. In fact, the more rights you exercise, the better off you will be. For instance, there are 3 main rules you need to understand before proceeding forward:
You have the right to:
IRS representatives have been known to play a good game of bluff. Many taxpayers fall for what is first told to them without ever questioning a thing. There are three very common bluffs/myths that can be dispelled right now to allow you more standing in the audit process.
The IRS may tell you:
If you go through an audit and eventually the auditor reaches a decision that seems unfair or unrealistic to you, you can bring the audit decision to a higher level known as the Right of Appeal. Most people think the decision is once and done and that the auditor is all-powerful and can promptly hit you with penalties or seize assets. The fact is that is not true and the IRS auditor really hasn’t much power at all. In the event an IRS auditor tries to collect more tax liability than you actually owe or denies you of any of your rights, you can not only appeal the decision, you may also recover any costs and fees associated with your appeal.
The audit process can be tedious and frightening but if you approach the process with knowledge of your rights, you will be less likely to feel strong-armed into decisions you do not agree with. By all means, you are to act responsibly and answer honestly about your information provided to the IRS, but don’t let a good bluff cost you more than you owe.
This post was published on April 23, 2010