What to do when you learn that you might be called in for an IRS tax audit? One thing you will want to prepare for and to do while you are being audited is to know what to say to the tax auditor.
You will also need to do your best to collect as many tax documents as you can to provide evidence for what you have claimed on your tax return. Preparing for an audit is time-consuming but well worth it in the end. In a worst-case situation, you may find yourself having to repay any excess money you overclaimed or understated.
It is important to remember that preparation for an audit is only part of your efforts to prepare for an IRS tax audit. The IRS will also conduct interviews with you to determine whether or not you are a qualified person to handle your business affairs.
They will want to review your business plan, your income statement, and your balance sheet. Your knowledge of how to properly prepare for an IRS tax audit is very important if you want to preserve your integrity and credibility with your clients and the IRS.
If you think that you could benefit from the services of a tax attorney, it is important to realize that these professionals are very costly. A tax audit could cost you tens of thousands of dollars. If you are prepared for this event, though, you may be able to save money. So, if you can afford to pay for the assistance, go ahead and do so.
If you do not have the money to hire a tax attorney, you may still prepare for an IRS audit using professional preparation services. Several such companies specialize in helping people prepare for such examinations. It is important to note, though, that these companies will only advise you and offer suggestions.
They will not prepare your tax papers for you. They will offer valuable advice on what to prepare and how to prepare for an examination by the IRS. Many of these types of companies also have several former IRS agents on staff, so they will probably be able to provide you with some useful contacts.
You should also take some time to consider what it will cost you to hire an accountant to help prepare for your audit. Many individuals who owe back taxes will simply decide not to retain any tax accountants to help prepare their documents.
This will help you avoid hefty fines, penalties, and interest charges, which can add up quickly when you are unable to repay your back taxes. If you do decide to retain an accountant, however, it is a good idea to find out what services the company provides and whether these will meet your needs before hiring them to prepare your papers.