A letter from the Internal Revenue Service (IRS) is rarely cause for celebration. Likely the only exception is when the agency sends a refund check. Other than that, a mailing from the IRS can cause stress. In some cases, the agency may simply be asking for more information, in others the letter could be notification of an impending audit.
Those who are the subject of an audit are wise to take it seriously. One way to help better ensure the process goes smoothly is to follow these three tips:
Tip #1: Do not ignore the IRS. Although it is tempting to throw the letter away and pretend you never received the notification, it is not wise to follow through and actually ignore the IRS. The IRS will not back down. Instead, failing to respond to the agency could result in additional penalties and fees.
Tip #2: Do not lie to the IRS. Lying to any federal agency is not a good idea. Lying to the IRS could lead to allegations of tax evasion or tax fraud.
The agency does not take such crimes lightly. The government has pushed to put offenders behind bars. The United States Sentencing Commission reports more than half of those convicted for tax fraud received jail sentences, with an average sentence of 17 months.
Tip #3: Do not stop fighting. You can fight back if, after cooperating with the audit, you believe the results were unfair. The IRS’ decision is not final. Taxpayers can appeal the IRS’ decision. A successful appeal can result in a reduction in the taxpayers’ tax liability.
Taxpayers can better ensure their rights are protected by seeking legal counsel. An attorney experienced in IRS audits and appeals can meet with the agent on your behalf and gather the documents needed to help fight for your interests.