Receiving a tax audit notice seems like one of the worst nightmares in the tax world. It’s understandable to panic and to express fear caused by the matter. The good thing is that your chance of getting audited is relatively small. However, it happens and no one can guarantee you that you wouldn’t be hit. However honest and careful you might be, there would be situations wherein a mistake or two would slip past your scrutinizing eyes. It’s inevitable. But once the mistake is done, you should not despair because this is not the end of the line for you. By handling the situation properly and carefully, you can survive through the tax audit scenario.

It is your responsibility to take good care of and double-check your tax returns. The IRS gives exemption and deductions every now and then but if you keep on submitting erroneous records, you might lose this privilege. Make sure you maintain accurate records to avoid being audited and to save yourself from trouble. If all else fails and you have already received a notice, stay calm. There are steps that we can take to handle it properly.

Read the Notice Carefully

Receiving a notice from the IRS does not automatically mean you are subject to auditing. There are cases that they just want to clarify a specific or a couple of details in your return. You can answer their questions and be done with it. Don’t panic since it will only cost you time and stress, and possibly another mistake in answering which can then result in auditing. If it is really about a tax audit, then understand what part of your tax return will be audited. That helps you in your preparation and should be taken seriously.

Be Prepared

There are 3 types of audits that can be done. One is a mail audit wherein they ask you to mail certain information to prove the accuracy of your claim. Another one is an office audit in which you would be asked to go to an IRS office for more in-depth questioning. This applies when there are questions left unanswered with the mail audit. The last one is field audit where IRS agents will come knocking at your door and do a thorough questioning and ask about everything stated on your return. Once you receive a letter, make sure to double-check your records and have someone knowledgeable to take another look at it before sending it. This reduces the chance of being asked to go to the IRS office and/or getting a visitor from their team. One way to prove your claim is to ask a third party to support you. This can be dependents or charity wherein you have donated.

Respond Quickly and Be Polite

Receiving and audit notice can be fearful, aside from being surprising. It’s easy to be enraged by the fact and some people often respond with rudeness or do not respond at all. If you would be subject for an audit, the best way to deal with it is to respond quickly and to show good manners. They are not auditing you just because they want to. It is because they found something erroneous or misleading in your return and want to double-check it with you.
Dealing with such notices can be daunting, but you should not let it get into your nerves. Ask for help from a tax resolution professional to make sure you can extinguish the fire right away. They will help you in providing accurate information to be sent back to the IRS and to follow a tested and proven guideline to deal with this matter smoothly. You don’t have to burden yourselves and use up all your time. The help of a tax expert can be the biggest investment you can make regarding your financial matters.

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BC Tax Insights Team
Posted By: BC Tax Insights Team

Authored by the BC Tax Insights Team, this article reflects the collective expertise and experience of our seasoned tax professionals. The Insights Team at BC Tax comprises specialists with a deep understanding of various tax scenarios and solutions. With a focus on providing informative, accurate, and practical insights, our goal is to guide readers through the complexities of taxation and financial planning. Every piece is crafted with the intent to help individuals and businesses navigate the ever-evolving world of taxes, ensuring clarity and confidence in decision-making.