What if the worst day of your life just kept going?
That’s what it feels like when you get an IRS audit. Most people don’t know how they will get notified of an audit or what to do next. And that can make a scary time that much worse.
How does the IRS notify you of an audit, and how should you handle things from there? Keep reading to find out!
How Does the IRS Notify You of an Audit?
How does the IRS notify you of an audit? The IRS may notify you in person, by local office, or via mail.
While it is extremely rare, you may be notified by the IRS visiting your home or business. This is known as a “field audit.”
You may also receive a phone call or correspondence requesting you to visit a local IRS office for your audit. This is known as a “desk audit” or “office audit.”
By far, the most common way people are notified of audits is by mail. This is known as a correspondence audit, and it will not require you to see any IRS officials in person.
Prepare Your Responses
Most audits are mail audits, and most mail audits focus on just a few elements of your return. It’s important to inspect what the letter says, review your taxes and finances, and begin preparing your response. If you have a professional helping with taxes, they can help with your response.
Field and desk audits may go more in-depth, with the IRS asking more questions. Don’t panic, though: as before, you just need to focus on preparing detailed responses to whatever the IRS is asking about, gathering documents and info as needed.
Always Respond In a Timely Manner
Every IRS audit involves the agency asking you for more information. It is important for you to respond to these requests in a timely manner.
This is going to involve a lot of back and forth with the IRS, especially if it is a mail audit. At the end of it, the IRS will reach a decision regarding whether you need to make changes to your return.
Appeal If Necessary
Many who are audited by the IRS end up disagreeing with their findings. For example, the IRS may claim you weren’t allowed to take a certain deduction, but you are convinced that you were allowed to do so.
If you wish to appeal the IRS decision, you must request one from the IRS Office of Appeals within 30 days of their decision. You will then get a Statutory Notice of Deficiency that closes the audit and lets you take your case to the United States Tax Court.
If your audit was by mail, keep in mind that you must appeal within 30 days of getting the letter proposing adjustments. If you miss that window, you will be unable to appeal the audit.
Protect Yourself From an Audit Today
Now you have an answer to the question “how does the IRS notify you of an audit?” But do you know who can help you avoid audits and, worst case, help you through them?
Here at Sterling Tax & Accounting, we specialize in all things taxes. To see what we can do to help you avoid, complete, or appeal an audit, contact us today!
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