A tax audit does not necessarily mean you have done anything wrong. It is simply a way for tax authorities to ensure that taxpayers are paying the correct amount of tax. You can get an IRS tax audit notification for several reasons like income reporting discrepancies, high income earner, running a cash business, etc.
The IRS audit letter will include important information like –
1. The reason for the audit:
The message will state the specific area of your tax return that the IRS is auditing, such as your income, deductions, or credits.
2. The time period under review:
The document will indicate the tax year or years that the audit covers, as well as the deadline for responding.
3. The type of audit:
The letter will state whether the audit is a correspondence audit (conducted by mail), an office audit (carried out at an IRS office), or a field audit (carried out at your home or place of business).
4. A list of documents and records requested:
The document will list the specific documents and records that the IRS wants you to provide, such as bank statements, receipts, and invoices.
5. Contact information:
The letter will provide contact information for the IRS auditor assigned to your case, including their name, phone number, and address.
6. Instructions for responding:
The notification will provide instructions for how to respond to the audit, such as how to submit your documents and records, and any deadlines that you need to meet.
It’s important to carefully review the IRS audit letter and take appropriate action in response. If you’re unsure about any aspect of the audit or what’s being requested, it’s a good idea to consult with a tax professional for guidance. They can provide valuable advice and representation in dealing with the IRS or state tax authorities.