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