HERE are 10 tips to pull you through an audit:
1. Bring the right attitude with you. It could spell the difference between winning and losing.
2. Be on time. Some auditors get irritated with taxpayers who come in late for an appointment.
3. Bring in only what is asked for. You might be inclined to give documents that are not under question if the auditor goes fishing. You might just innocently bring the fish that she wants.
4. Respect the auditor. She’s is a human being. Treat her like one.
5. Address auditors as Mr. Smith or Ms. Jones (not as John or Ann).
6. Listen to the questions carefully. Respond carefully. Innocent questions on how you earn or spend have meanings behind them.
7. Identify embarrassingly out-of-line deductions and ask the auditor to disallow them. You heard me: disallow (he’ll disallow them anyway). Use reverse psychology. Apologize. In the meantime, you recapture lost credibility.
8. Point out obvious mistakes early on, the ones that the auditor will surely find out.
9. Dress modestly. This is not the ideal time for you to wear expensive jewelry. Your tax returns could be showing losses for successive years. The auditor will probably wonder how poor you have been surviving all these lean years. Then you walk in with jewelry galore.
10. Get a tax professional to represent you. Sure, you can take care of simple questions about simple issues. But when the going gets rough, hire a CPA, Tax Lawyer or Enrolled Agent who can save whatever fees you pay her.
11. Ask your representative to go without you. You pay him not only to represent you but also to give you peace of mind. Let him worry about it while you sleep. Bear in mind that he can negotiate better without you in the room. Most auditors are rigid, formal, and righteous in your presence. Two professionals have a better chance of reaching a settlement without you in the room. I can work my magic when left alone with an agent.
12. Lastly, the most important element of an audit – CREDIBILITY. Bring it with you.
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Victor Santos Sy graduated Cum Laude from UE with a BBA and from Indiana State University with an MBA. Vic worked with SyCip, Gorres, Velayo (SGV – Andersen Consulting) and Ernst & Young before establishing Sy Accountancy Corporation in Pasadena, California.
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He has 50 years of experience in defending taxpayers audited by the IRS, FTB, EDD, BOE and other governmental agencies. He is publishing a book on his expertise – “HOW TO AVOID OR SURVIVE IRS AUDITS.” Our readers may inquire about the book or email tax questions at [email protected].
