IRS Audit: What to Watch Out For; The Self-Employed Are in the Bullseye

According to latest reports, the Internal Revenuededuction records. In order to ensure that your IRS
Service, or IRS, is increasing the total number ofaudit goes well, you can follow these tips:
income tax returns selected for audit. But it isn't as bad- During an audit, you need to show documents to
as it sounds, because the audit rate has actually goneprove any of your credit, deduction, or exemption
down. On an average, the IRS audits around 1 percentclaims that the IRS is questioning.
Americans every year. That minimizes your chances- You are well within your rights to ask for more time
for receiving an audit notice from the IRS, but doesn'tfor the audit, that is, postpone the date of the audit in
completely rule it out.order to get your papers in order.
On your part, you need to ensure that your tax return- Don't provide any more information than what is
doesn't attract unwarranted importance. This becomesasked for.
more important if you've made some manipulations in- Try not to have the audit at your home or office. Go
your returns. Your objective should be to show yourto the IRS office with all the documents, or you can
returns to be as normal as possible so that they mix ineven have your tax professional represent you.
with the innumerable other returns. Still, many- It's always better to consult a tax professional as
Americans do make the mistake of showing hugesoon as you're notified about the audit. Even while the
deductions or losses in their returns, which makes IRSaudit is in progress, you can always ask for a break to
audits inevitable.consult your tax professional. You can claim deduction
If you, too, have filed an income tax return that getsfor the fee you pay to a tax professional for audit
selected for IRS audit, then there are a few things thatrepresentation.
you need to remember. IRS audits are specifically- If during the audit, you feel that the auditor is not
targeted on those returns where the expected payofftreating you properly, you've every right to ask for the
amount is greatest. The self-employed are usuallyauditor's manager.
targeted the most; if you happen to be one, be ready- If you don't agree with the outcome of the audit, you
to backup your business expenses. Even while filingcan appeal.
the returns, if you've claimed a deduction that's higher- Chances are, you'll have to end up paying some
than average, it's better to attach supportingamount, so be prepared.
documents along with the return. This won't only proveIt is in the best of your interest to consult a tax
to the IRS that your deduction is genuine, it will alsoprofessional for the audit. And even if you feel that
discourage further IRS audits.you can handle the audit on your own, do inform your
Whatever the primary focus of the audit might be,tax professional to get a briefing about the audit, as
during the audit the IRS auditor gives maximumwell as to have the required documents in order.
importance to the entertainment, meal, and auto