Remember that we will initially contact you by mail. The IRS will provide you with all the contact information and instructions in the letter you will receive. If we conduct your audit by mail, in our letter we will request additional information on certain items on the tax return, such as income, expenses and itemized deductions. If you're being audited by the IRS, you'll receive a notice in the mail.
The IRS won't start an audit with a phone call or email. During an audit, the IRS will ask you for information and documents that explain your position on your tax return. It's important to provide the information as requested by the IRS. If you have a licensed professional responsible for auditing, help your tax professional with the facts and your tax professional will work with the IRS.
An IRS audit is a thorough review of your taxes and financial records to ensure that you have reported everything accurately. If the IRS selects your tax return for auditing (also called an exam), it doesn't automatically mean that something is wrong. Learn what the IRS is looking for during a business tax audit, what steps you should take to prepare for an IRS audit, and when it's best to get expert help. The IRS article, Accelerating digital communications to solve pandemic challenges and improve the taxpayer experience, also discusses digital options.
If the IRS audits your tax return, the IRS will carefully examine it to see if it included all of your income and if you only took the deductions and credits allowed by law. If you need or want help processing an IRS audit or reconsideration, you have the right to be represented. You can also visit the IRS auditing page for more information on why your return was selected and more details on how long it can take the IRS to review a return, how long it may take, and more. When reviewing the IRS notification, there may be special circumstances in which the IRS may offer digital alternatives for filing documentation or working with the IRS examiner.
You can also use the IRS Directory of Federal Tax Return Preparers with select credentials and qualifications to help you find tax professionals in your area who currently hold professional credentials recognized by the IRS. Find out how much time the IRS has to audit your return, when most audits usually begin, and how to know if you have been selected for auditing. If the IRS selects you for an audit and finds errors, the penalties and fines can be high, according to Joshua Zimmelman, president of Westwood Tax and Consulting. On your amended tax return, you can provide an update to your tax return and report the error to the IRS.
Before you worry about what the IRS can and cannot do during an audit, check out the Taxpayer Bill of Rights. Keep in mind that even if the IRS has only marked one return for auditing, it can review any return from recent years.