It is no secret that the Internal Revenue Service (IRS) is a large and complex organization. Even so, it is not as intricate as the tax laws they monitor and enforce. If you have ever had to actively engage in legal action regarding tax laws, you have probably quickly realized that the complexity of the process can feel overwhelming. If you are facing an audit, one of the most comforting things you can do is to learn about your rights.
According to the IRS, an audit is “a review/examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is substantially correct.” Essentially, the main goal of this process it to verify that the information the IRS has gathered in regard to your finances matches the information you have reported. Although the chances of being audited are relatively low, the chances do increase as you earn greater amounts of funds. Regardless, there are a few things you should know about IRS audits.
1) You will be notified.
While the actual auditing process may take place in person or by mail, you will be notified before the audit begins. This notification will come in the form of a phone call or by mail. If you are notified by phone, the IRS will also send you a letter verifying the notification. The IRS does not notify people by means of e-mail, so be wary if you do receive an e-mail from someone claiming to be a representative of the IRS.
2) You have rights.
Under federal law, you have rights that must be respected and maintained throughout the auditing process. These include a right to professional conduct on the part of the IRS and its representatives, the right to know what information the IRS wants as well as the reasons why they want it, the right to privacy regarding your records, and the right to appeal any decisions with which you disagree. The IRS has compiled a Taxpayer Bill of Rights and you will want to become familiar with it. If you feel any of your rights have been infringed upon during the process of your audit, you will want to consider contacting a legal professional who is familiar with tax laws to assist you.
3) Your opinion of the audit matters.
Once the IRS has completed its audit, you will be asked to sign either the report they have compiled or a document stating you agree with their findings. If you do not agree with their findings, you may have to meet with the IRS more to determine what mistakes were made or appeal their decision. Either way, having legal assistance will make the process go as smoothly as possible.