Receiving an audit notice can be stressful for many individuals and business owners. The Internal Revenue Service (IRS) can select you for different reasons, including random selection or errors in your returns or that of taxpayers you are associated with, such as business partners or investors.
If you receive the notice, you should act accordingly. Below are three mistakes to avoid when facing an IRS audit
1. Ignoring the notice
If the IRS notifies you of an audit, you should respond. Ignoring can lead to higher penalties and potentially a criminal charge. The audit can be conducted by mail or through an in-person interview, so it’s flexible.
Besides, you can request more time to respond to the requests of the audit. To do this, you will fax a written request to the number included in the letter you received. If you have opted for an in-person interview, you will contact the auditor assigned to your case for an extension. The IRS may grant you a 30-day extension or can decline your request.
2. Not providing all needed documents
The IRS will send a written request for the documents to be reviewed. If you want the audit to be conducted by mail, send all specified documents. If you are going for an in-person interview, carry them. The auditor assigned to your case can inform you of the acceptable types of records.
3. Submitting false information
During your audit, you should not make false statements or submit falsified records. Avoid guessing answers to questions you don’t know. The IRS has top-notch resources to recognize this. You can face significant penalties for this mistake.
If you received a notice of an IRS audit, get the knowledge and experience you need to avoid these mistakes and their consequences.