While the media portrays IRS audits as scary, most aren’t as terrifying as they seem. While working with a reliable audit firm will reduce the chances of filing incomplete or erroneous tax returns, it doesn’t guarantee that you won’t be audited. If you do receive an audit notice, here’s what to expect.

What Does the IRS Look for During an Audit?

Once the IRS selects your account for an audit, they will inform you by mail. You must then get started on preparing your paperwork and attempting to find out what the problem could be. An audit firm can review your records and shed light on any discrepancies. Some of the documents that the IRS may request from you include receipts, pay stubs, home mortgage statements, bills, and previous tax returns. Keep in mind that you are required by law to store all tax return records for no less than three years from a tax return filing date.

Why Are You Being Audited?

An audit doesn’t automatically mean you are suspected of criminal activity. For example, you may be audited due to rental losses, having foreign bank accounts, conflicting third-party income reports on W-2s, and home office deductions. Additionally, you may be audited if the IRS discovers that your tax return is not in accordance with the set norms generated by their statistical formula. If you have investors or business partners who are being audited, you may also be selected for an audit.

How Does the IRS Conduct Audits?

The IRS can conduct audits by mail, by means of in-office attendance, or via field investigation. Mail correspondence is the most common, and it can often be resolved by submitting additional documentation. If you’ll have an in-office audit, expect to provide more detailed explanations regarding your tax filing, along with specified paperwork. In these cases, it’s best to hire an audit firm to represent you. A field audit is normally the most intimidating of the three because it involves an in-depth investigation conducted at your office or home.
 

If you are being audited, count on Bergamo Tax & Financial Solutions to provide you with valuable guidance. This established audit firm houses prudent and dedicated accountants who offer personalized advice. They will meet all of your tax and financial needs in Watertown, CT. They also serve surrounding areas, such as Middlebury, Waterbury, and Litchfield. Call them at (860) 274-1655 to speak to a professional, or visit their website to learn more about their services.