YES, I know, audits are serious stuff. But they do funny stuff to people like you when you are under audit, under stress. I have seen clients pretend to be cool when they are actually scared. My advice is for you to act naturally; otherwise, the auditor may think that the return is also a fake. Here are tips to pull you through an audit—alive.
1. Be on time. Auditors get irritated if you come in late for an appointment.
2. Bring the right attitude with you. It influences people around you – especially the agent in front of you.
3. Bring credibility to the audit – your most critical armor when visiting the IRS.
4. 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.
5. Jewelry. 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.
6. Address auditors properly - as Mr. Smith or Ms. Jones (not as John or Ann).
7. Point out obvious mistakes early on, the ones that the auditor will surely find out.
8. Identify embarrassingly out-of-line deductions and ask the auditor to disallow them.
You heard me: disallow (she’ll disallow them anyway). Use reverse psychology. Apologize. In the meantime, you straighten out a dent in your armor – credibility.
9. Ask your representative to go without you. You pay him 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 (the agent and your representative) have a better chance of reaching a settlement without you in the room. Personally, I can work my magic better when left alone with an agent.
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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].