Q. "What does an IRS audit look like?"

Answer:

While audits can be intimidating and the results will vary organization to organization, the full process is spelled out in IRS Publication 556. The basic steps are as follows:

  • The IRS will contact you directly

  • Though the IRS decides when, where, and how the examination occurs (i.e., via mail or in-person), you do get to provide input

  • You can appoint a representative (i.e., your attorney or CPA) to handle the audit with or for you

  • Provide documentation in support of your return(s)

  • The IRS informs you of any proposed changes

  • If you agree, sign and pay additional taxes, as needed

  • If you disagree, you can appeal and the IRS will send you:

    • A letter notifying you of your right to appeal

    • An explanation of proposed changes

    • An agreement or waiver form

    • A copy of IRS Publication 5 explaining appeal rights

  • Sign and return to agree with the proposed changes

  • If you still don't agree, appeal or escalate to federal court

 

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