5 Things You Need To Know About Getting Audited

Posted on February 12, 2011. Filed under: -- Money Help (in simple terms), -- Saving Money And YOU, -- Top 10..., -- Uncategorized, . More Resources For YOU!, Tips | Tags: , , , |

As tax time rolls around for all of us this year, here are 5 Thing You Need to Know About Getting Audited. At least according to Money Magazine. Enjoy!
1. AUDITS ARE ON THE RISE. Money says that the number of audits has risen steadily year after year, and that experts expect the trend to continue. They also add that audit letters typically go out 18 months after the filing date.
2. DELAYING CAN COST YOU THE RIGHT TO FIGHT.  If you receive a letter from the IRS be sure to take action within 30 days upon receipt. Otherwise dispute moves on to a collection agency, which becomes a total nightmare.  If you can’t get everything together in 30 days, you have the right to ask for a postponement. The IRS does not have to, but they should grant you more time if you need it to track down records.
3. IT CAN HELP TO HAVE A PRO ON YOUR SIDE. Almost 3/4 of audits happen by mail, with the IRS requesting certain documentation (like receipts) on a specific part of the return. You can handle this type of audit on your own, but if someone else prepared your taxes you should ask him to weigh in. The fee you paid could cover such help, and the agreement you have may put the person on the hook for mistakes. If the audit requires an in-person meeting, it will probably get in-depth with some issues. You’ll then probably want an advocate like a CPA on your side with audit experience. Expect to pay $500 to a few thousand dollars.
4. ANYTHING YOU SAY CAN BE USED AGAINST YOU. In other words, do not offer any additional information beyond what is asked for by the examiner.  
5. THE AUDITOR’S BOSS MAY BE ABLE TO NEGOTIATE. Unhappy with what the auditor is finding? Ask for his or her supervisor. Like in most situations, the manager has more angles to work.  If the manager doesn’t see your side, file an appeal. The other option is to take them through the legal system. Money says that may not be worth the cause unless there’s more than $10,000 at stake.

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