How to Handle an Audit Notice

What happens when you receive an Audit Notice from the IRS?

More than likely, your first instinct will be to panic. However, getting audited doesn’t always mean that an error was made on your tax returns. Returns are chosen for a few different reasons:

Most audits simply come from Document Matching. When you receive a W-2 form or a 1099, that information is also sent into your file at the IRS, ready to be matched. If you do not report that income on your return, the IRS computer will automatically spit out a notice recalculating your income and tax, along with a bill for that tax, plus penalties and interest.

When this happens, you must defend yourself and do some research to find out whether the IRS is correct. Many times they are correct about the oversight in reporting the income, but most of the time they are wrong in regard to the ways that it will increase your tax.

If you don’t have experience dealing with the IRS, you’ll need a Tax Professional to defend you. If you choose to defend yourself, you’ll most likely be paying far more to the IRS than you should—if you should be paying at all!

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