What To Do If You Get Audited

You’re at home going about your day when the phone rings.  When you answer, an unfamiliar voice tells you they are from the IRS, and they want to “examine” (audit) your tax return from two years ago.  What should you do?  What should you not do?

Do:

  • Do stay calm.  There is no automatic assumption that you have done something wrong. The overall audit rate is a little over 1%.  In 2011 it was reported that for people having incomes of $200,000 or higher there is a 3.93% chance of being audited.  If you have income of more than $1million, the rate jumps to a one in eight chance of being selected for review.  Hence, the increase in success is somewhat proportional to the chance of being audited.
  • Do tell them you want to be represented by your tax advisor, and you do not have the information at hand to accurately address ANY tax related questions. You will need to sign a power of attorney in order to have a professional represent you.
  • Do contact your tax advisor immediately and give them as much information as you have. Never ignore a request from the IRS.

Do Not:

  • Do not be rude, yell or insult their choice of profession.  That would be akin to stirring up a bees’ nest and then asking your buddy to go get the honey.  If the agent is rude to you be pleasant, make note of their behavior, and pass that along to us.
  • Do not volunteer information they did not ask for, even if you have been audited in the past.  Your CPA or attorney should be answering these questions.
  • Do not let the agent intimidate you with threatening levies, or thousands in additional taxes, etc.  If they try this, make note and pass it along to us as in number 1 above.  Be as specific as possible.
  • Do not respond to an email from anyone claiming to be from the IRS, ever.  The IRS does not use email to contact taxpayers, and the sender is a scammer trying to trick you into giving them sensitive information.

Although we hope it never happens, in the event of an audit, we are here to help! If you are phoned or receive an audit notice in the mail, do not delay in contacting us.

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