How Does the IRS Notify You of an Audit?

The IRS will notify you of an audit by mail only. It will not initiate an audit by phone or email. This is important as many taxpayers fail prey to con artists who call or email individuals claiming to be the IRS. The IRS notice letter also has certain characteristics that can help you distinguish it from a scam. While getting a notice from the IRS is always stressful, you should never ignore it. That will only result in more problems. Instead, here are a few steps you should take:

• Verify the notice letter’s authenticity.

  The notice should arrive via certified mail and identify your name, taxpayer ID, form number, employee ID number, and contact information for the IRS. It will have an IRS form number and state that your return has been selected for examination or under audit and request additional information. You can look up contact information for the IRS online yourself and call them independently to verify the audit if you are suspicious. A tax attorney can also confirm whether the letter is real.

• Gather documentation to prove your claim.

  You will have to support the information in your tax return being questioned. That may include providing receipts, canceled checks, bank records, etc. If you don’t have the documents in your possession, reach out to third parties that may have them, such as a bank, charitable organization, vendor or other party.

• Contact a tax professional for help with your audit.

  If the audit involves more than simple mathematical errors or you are unclear as to why you are being audited, it is best to talk to a tax attorney or accountant to determine what information you should be providing and how best to move forward. IRS rules are very precise and failing to provide correct information can delay resolution of your matter or result in disallowing your deduction and getting a tax bill. Further, a tax lawyer can ensure you present a strong case and that you don’t offer more evidence than you need to give. If needed, an attorney can also negotiate a settlement of your debt and inform you of your eligibility for programs to reduce your tax liability.

• Respond to an audit letter in a timely manner.

  Your response must address every issue raised by the IRS and if needed, provide an explanation of why you disagree with the agency’s findings and offer evidence to support your position. The information must be sent to the IRS in accordance with its instructions. If you fail to respond by the deadline, it can result in collection action as well as additional interest and penalties.

Having the IRS notify you of an audit is scary, but in many cases, the matter is easy to clear up. If it isn’t, then it is important to get good legal advice as soon as possible. The longer you wait to respond, the longer it will take to resolve your issue and the more you will pay to the IRS and to a lawyer.

If you owe money to the IRS and/or have received a notice letter, contact one of our IRS attorneys for a consultation to learn how we can help you achieve a positive outcome in your case. We represent both individuals and businesses with respect to all types of taxes.