THE IRS will tell you what records to bring to an audit. The requested documents varies based on your situation. They will need support for income that you report and deductions that you claim.
This may include income records for wages, dividends, stock trades, and bank statements.
This may include records to support deductions for mortgage interest, property taxes, or donations.
If IRS asks you to respond by mail (correspondence audit), they will provide the address for you to mail the paperwork. They may also require you to fill out a questionnaire. Ask your tax preparer to fill out the questionnaire or compose letter and review documentation. If you send the wrong stuff, it will be hard to undo a letter or anything else that you send. You have to do this right from the start. This is not the time to be stingy on fees. It could cost much more in the end.
If the IRS wants to see you in person at their office (office audit) they will instruct you on what documents to bring via IDR (Information Document request). Gather and organize your paperwork methodically by year and by income or expense category to speed up the process. Again, ask your tax preparer to go for you – for you – not with you. I don’t want you going with your representative to the IRS. You won’t enjoy it. You may hinder your POA’s settlement skills. Personally, it’s hard for me to settle with you in the room. I can’t negotiate with you around. I work better without you. I rarely lose audit cases but I did lose a few when I brought some taxpayers to the IRS early in my career.
After they receive your paperwork, the IRS will evaluate your documentation. They can request more documentation or make a determination to end your suffering.
After determination, the audit process ends with either:
• No-change or
• Proposed changes with an itemization of adjustments and bill or amount of refund.
Good luck.
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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].
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