tax audit
Photo by CC user 401(K) 2012 on Flickr.

If you find yourself opening the mail box only to discover a tax audit, you may first feel overwhelmed and nervous. Though those are two very reasonable emotions to feel, not all is lost. Most audits can be fought with the help of an appeal and/or a tax attorney. Read more below to discover what steps are needed to take to successfully fight a tax audit.

What is a tax audit

When a tax audit is broken down, it is simply an examination of your tax return either from your last year of taxes or possibility from a year before that. When looking through tax returns, you could find yourself up for an audit if the IRS renders your tax return as suspicious in some form or another. This usually happens when they feel that something, or multiple things, within your return is out of the ordinary.

There are three different types of audits to take into account. They are what the IRS refers to as mail audits, field audits and office audits. Mail audits are generally thought of as the simplest form of a audit where the IRS sends you a letter requesting additional information or documentation to prove that the marked items on your tax return are indeed correct. With this type of audit, you don’t need to meet an auditor face to face.

A field audit is when an IRS agent or personnel with conduct an audit directly at your home or your business. This is generally because the IRS is questions multiple parts of your tax return. An office audit is simply an audit that is conducted at your local IRS office. These audits are generally pretty in-depth as well.

How to fight a tax audit

If you happen to receive an audit, the next step you’ll want to take is to appeal the audit by sending in a protest letter. In order for your protest letter to be taken seriously, you must send it in within 30 days of receiving your audit report. If for some reason your appeal fails, it’s time to consider hiring a New York tax attorney or another attorney for a different state. Tax attorneys will help guide you through the maze that is a tax audit appeal. First they’ll help you to completely understand why the IRS is fining you and what exactly the fines represent. Then they’ll work with you to fight the audit and to reduce any and all fines, or to eliminate them all together.

Ways to avoid a tax audit

Before you file your taxes, it’s important to note ways to avoid a tax audit in the first place. If you’ve already received an audit for last years taxes, this information will help you to avoid one in the years to come. Some ways to avoid a tax audit are:

  • Understand the entire audit selection process
  • Incorporate if you’re self-employed (this is also true if you work online)
  • Know what auditors often question
  • Provide explanations within your return
  • Avoid filing amendments
  • Check your math throughout the return
  • Try to be exact and neat in your filing

Taxes in themselves are no fun. Tax audits from the IRS are even worse. If you find yourself on the receiving end of a tax audit for one or more years of returns, you’ll want to both fight the audit and hire a tax attorney to represent you.