Receiving notice of an audit by the Internal Revenue Service can be intimidating and overwhelming. You know this is a serious matter, but you may not be certain of how you can pursue a beneficial outcome and protect your interests. Knowing what factors may trigger an audit and what to expect at every step of this process may help you feel confident as you navigate the requirements.
There are options available for those in Georgia facing an audit by the IRS, including the ability to defend yourself during the audit and filing an administrative appeal. If you have received a Notice of Deficiency or notice of tax examination, you will benefit from taking immediate action to understand what is ahead and how to protect your interests. In some cases, it may even be possible to negotiate a settlement.
Reasons for an audit
The IRS may initiate an audit if its system flags something that is drastically different this year than from last year or a previous year, or if there is something in your return that is unusual for other taxpayers with similar financial situations. The IRS may also audit you if you work closely with someone else whom they audited, such as a business partner or investor. The IRS does not conduct audits for small mathematical errors, forgetting a form, filing early or late, claiming several deductions and other common reasons.
At the start of an audit, you will likely receive a notice of tax examination or Notice of Deficiency. You will have to respond to the letter within a certain number of days, and you may have to send additional documentation to the IRS. While most audits take place completely through the mail, you may have to meet with a representative from the IRS. Audits are more complicated for high-income earners, estate tax returns and those with returns that claimed no positive income.
Don’t face an audit alone
If you received notice of an audit, now is the time to take action. With preparation and an understanding of how you can protect your interests throughout the audit process, you will be in a better position to shield yourself from additional complications and financial penalties. It may be useful to start with an assessment of your case in order to identify the most appropriate way forward.