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).
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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].