Q&A: What to expect during an IRS audit

HOW did I get selected for an audit? 

• Random selection and computer screening – how your return compares to norms.

• Related party examinations - transactions with partners, investors, or audits of other entities.

How will IRS notify me of audit?

• IRS will notify you by mail.

• They do not start any audit by telephone. They never do.

How will the IRS conduct my audit?

• By mail or in-person interview.

• Interview may be at an IRS office (office audit) or at your home or place of business (field audit).

• The best place for you: your accountant’s office.

What should I provide?

• The IRS will provide you with an Information Document Request (IDR) – a list of needed records.

• Work systematically to locate documents requested. Don’t be disorganized.

• Check off your list as you locate each document.

• Clean up your dining table and sort documents by groups. Label and “Post It” notes with bold pen.

  What if I can’t respond right away?

• Contact the auditor assigned to your audit to request an extension.

• For audits by mail - fax your written request to the number shown on the IRS letter you received.

• If you don’t have a fax, mail your request to the address shown on the IRS letter.

• IRS routinely grants you a one-time automatic 30-day extension. Use it only if necessary.

• Caution: There is no extension for “Notice of Deficiency.”

• You have to petition the U.S. Tax Court within 90 days.

• Caution: 90 days refer to date of receipt, not date of mailing.

How long will the audit take? 

• It depends on type of audit,

• Complexity of the issues,

• Availability of information requested,

• Your agreement or disagreement with audit results.

    What results do I expect?

• No change: No bill, no pay, you win.

• Agreed: You agree with the changes and pay or apply for installment plan.

• Disagreed: You disagree with the changes. Go to appeals.

  What happens if I agree with audit findings?

• Sign the examination report, pay, and end your misery.

   What happens if I disagree with the audit findings?

• equest a conference with an IRS manager (almost never works).

• File an appeal (almost always works).

* * *

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.  

* * *

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].

Victor Sy, CPA, MBA (retired)

Victor Santos Sy, MBA. CPA (Retired) 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. * * * He retired after 50 years of defending taxpayers audited by the IRS, EDD, BOE and other governmental agencies. He published a book on “How to Avoid or Survive IRS Audits” that’s available at Amazon. Readers may email tax questions to [email protected].

The Filipino-American Community Newspaper. Your News. Your Community. Your Journal. Since 1991.

Copyright © 1991-2023 Asian Journal Media Group.
All Rights Reserved.