What to know about a tax audit

The word ‘audit’ usually brings anxiety. It can be intimidating to think that the Internal Revenue Service is investigating the information on your tax return.

The good news is that most tax audits are not because you broke the law, and the process does not necessarily have to be difficult.

Reasons for an audit

The IRS states that not all audits occur due to suspected problems or fraud, as many audits occur due to random selection based on computer screenings. The IRS may also request an audit if another taxpayer, such as an investor or business partner, faces an audit and the results may also involve you.

How the IRS informs you of the audit

IRS audit notifications only occur via mail. If you receive an email or phone call regarding a federal audit, it is probably a scam.

Items to provide

The letter from the IRS will provide details as to the reason for the audit and how the audit will take place. Gather all documents and information requested, but do not provide any additional information the IRS does not ask for.

If the audit occurs via correspondence, you will mail the relevant materials in. There may also be directions for sending them via email.

If it is an in-person audit, it takes place either at an IRS office or at your home, business or your accountant or attorney’s office.

What to do if you disagree with the findings

Once you receive the auditor’s findings, you can agree and pay the associated payments and fines, or you can disagree. If you disagree, you can file an appeal or request a meeting with an IRS manager. According to the Louisiana Department of Revenue, if your state tax return is under audit, you can write to the LDR Audit Review and Appeals Division to request a review. Consulting with a Baton Rouge Tax Lawyer can help you navigate this process and ensure your rights are protected.