On TLC’s What Not to Wear Stacy and Clinton give a ‘make over’ to some lady that is, well…not dressed so well… Taxpayers that are being audited need to make sure they are putting their best foot forward right at the start of an IRS audit.
Field, Office and Correspondence Audits
The first thing a taxpayer needs to understand is The Difference Between an IRS Field Office and Correspondence Audit. If it is a correspondence audit, it doesn’t matter how you are dressed. All of the communication with the IRS will be done through the mail. It appears that more audits will be correspondence audits due to the IRS wanting to allocate its resources. Depending on the situation, this may not be in the taxpayer’s best interest. They may actually prefer to meet with the IRS to, “tell their story.” You should carefully review your situation with your CPA to see if meeting the auditor would make more sense.
Power of Attorney
If it’s either a Field or Office Audit, then you should understand Why You Should Not Represent Yourself in an IRS Audit. By giving your Power of Attorney to your CPA you will not be required to be present during the audit. As a taxpayer, there is a tremendous advantage to this. Being audited can be, well, stressful. By not having to attend the audit, the taxpayer should have less stress. Additionally, by not attending, they can’t answer any questions that aren’t asked. This is key!
Audits From Hell
Unfortunately with some audits you’re going to need to know How to Survive the Audit From Hell. These may require a taxpayer to attend for a portion of the audit. Again, it may be appropriate to provide some more background.
ACTION ITEM: Taxpayers that are being audited need to think twice about how they present themselves in front of the IRS.
Thomas F. Scanlon, CPA, CFP®
Photo From Creavtive Commons
Tom Scanlon has over thirty years experience in public accounting with an extensive background in the areas of financial, tax, and estate planning. He prides himself on providing in-depth and customized solutions to privately held businesses and their owners. He is a Certified Public Accountant and Certified Financial Planner®. Tom is a frequent speaker for area organizations and has recently been quoted on CNBC, Fox 61 News and AARP's blog. Tom also has been a guest columnist for numerous publications including The Wall Street Journal, Barron's, Money Magazine, The Hartford Courant, The Hartford Business Journal, and The New Haven Register. He is a member of the American Institute of Certified Public Accountants, the Connecticut Society of Certified Public Accountants, and the Financial Planning Association. Active in the community, Tom supports a variety of not-for-profit organizations.
