Does the idea of undergoing an IRS audit fill you with dread? You aren’t alone!
Mark Hauser is a private equity investor with decades of experience working in the financial field. While atop of his industry, Hauser works to give his clients the information and skills that they need in order to overcome hurdles in their way, up to and including an IRS tax audit.
Mark Hauser suggests that preparing for a tax audit is integral to the experience’s success. As a result, Hauser has decided to outline a few of the best ways taxpayers can prepare when an IRS audit letter shows up in their mailbox.
Understanding the Audit
An IRS audit can be triggered by a number of risk factors and/or situations. A tax audit notice will appear in an individual’s inbox. After that, they have up to 30 days to reply, though Hauser suggests doing so as quickly as possible. The process involves the IRS requesting a host of documents that an agency’s representative will then examine, indicating whether the audit will be done by mail or in person.
Preparing for the Audit
An IRS audit should never be taken lightly, at least according to Mark Hauser. Long before the scheduled date ever approaches, Hauesr suggests determining representation for the event. The taxpayer may be accompanied by an IRS Enrolled Agent, a paid tax prep professional, a Certified Public Accountant, or by nobody at all.
The length of the audit will depend on the complexity of the financial information for the taxpayer in question. The audit will involve requested documentation, potential meetings, and several conversations throughout the experience.
To best prepare for the audit, Hauser suggests
- Bringing COPIES to the Audit
- Employ a Professional Representative
- Comply With ALL IRS Document Requests
- Consider Appealing the Outcome
Potential Outcomes of an IRS Audit
Mark Hauser understands that all audits will undergo different experiences. With that being said, there are three fundamental outcomes that taxpayers can prepare for when undergoing their audit.
Mark Hauser points to the following audit outcomes:
- Zero Changes – The taxpayer has complied with and provided sufficient evidence to the IRS representative. There is no further action needed.
- Changes + No Agreement – The IRS suggests changes that the taxpayer understands but disagrees with. The taxpayer can seek mediation, file an appeal, or meet with an IRS manager.
- Changes + Agreement – The taxpayer understands and agrees to the changes proposed by the IRS agent. Further payment may be arranged for taxes due.
Throughout the entire process, Mark Hauser suggests leaning on the expertise of a professional you can rely on.