unreasonable. If you arrive at the audit with a large chip on your shoulder, you might make the auditor less willing to see things in your light. look at yourself
Provide only copies. Don't bring original documents to the audit. If you do bring originals, do not give them to the agent. Request that the agent make copies and give the originals back to you. Once you hand over your original documents, there's a very good chance that they will be misplaced or lost. Then you're the one holding the bag, since the IRS isn't responsible for documents lost in its possession. little boy
Stay on point. The auditor will be able to obtain some valuable information in what seem to be simple and friendly discussions. Asking about my softwarean expensive new car that you might have purchased, or that vacation to the Greek Isles, might give the auditor reason to believe that you're not reporting all of yourI miss my home income and thus expand the scope of the audit. When you meet with the auditor, in essence, you're providing testimony. So answer as many questions as possible with a simple from and go"yes" or "no" response. If you must expand or explain, keep it brief and very much to the point. Don't give the auditor a reason to expand the audit because of your tendency to ramble on.Know your rights as a taxpayer. Remember that an audit is like a small trial. It is an adversarial exercise. So while you can disagree without being disagreeable, you must know your rights, the audit process, and the law behind the deductions you are claiming. Settling any difference at the audit level is generally best, but if you can't come to an agreement, you have rights that allow you to request a conference with the IRS Appeals Division.
Be aware that appeals officers are even more senior than agents, with much more experience and knowledge behind them. If you're making a specious argument that the tax law doesn't support, the appeals officer will quickly shoot it down. However, if the issue is complicated and your argument is founded in tax law and court cases, the appeals officer can make quick work of the analysis -- and might just find in your favor.
Again, your best bet if you're audited is to retain the services of a qualified and experienced tax pro who can argue your case without passion or prejudice. Such a person already knows the most effective ways to help you quickly resolve a conflict with the IRS. Hiring such a person is not cheap, but quality services never are, and you could pay a lot more if you don't hire a professional and the audit doesn't go well. The tax code has become so complicated that you're unlikely to know the law as it applies to your tax return and your rights as a taxpayer. That's why a qualified tax pro can be worth every dollar of his or her fee.But again, for those of you who decide to go the do-it-yourself route, stick to the game plan we've discussed here. And if you ever decide to remove your own appendix, well, good luck with that, too.
his article was originally published on Oct. 13, 2006. It has been updated.When he's not dealing with tax issues, Fool contributor Roy Lewis is a motivational speaker who lives in a trailer down by the river. He understands that The Motley Fool is all about investors writing for investors. You can take a look at the stocks he owns, as long as you promise not to ask him which stock to buy. He'll be glad to help you compute your gain or loss when you finally sell a stock, though.Copyrighted, The Motley Fool. All rights reserved