Taxpayer Advocate Service Advises on IRS Audits

IRS audits don’t have to be intimidating. The Taxpayer Advocate Service wants to demystify the process.

If the IRS audits your tax return, it does not mean you made a mistake or were dishonest. It just means they’re trying to determine whether your income, expenses, and credits are being reported accurately.

Four out of five audits are done by correspondence, usually asking for clarification on a particular item. If the IRS sends you a letter notifying you about an audit, they will include Publication 1, “Your Rights as a Taxpayer”. They will also tell you what the audit will cover, and ask for documentation to support the items on your return.

Don’t ignore this letter. If you don’t respond or send documentation, the IRS will still complete the examination. If they don’t see paperwork proving otherwise, they’ll assume you had more income or fewer expenses or credits, and will adjust the amount of tax owed.

If you disagree about the IRS’ decision about what they think you owe, you have the right to appeal. You can also work with the Taxpayer Advocate Service, who will help you understand what needs to be done to resolve your situation. Contact them at 1-877-ASK-TAS1.

About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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