The IRS uses Letter 3572 to inform you of an audit. They want to ask you questions in your home, office or the IRS office. An audit is a legal process against you & attorney guidance is advisable. From the Letter 3572 you can obtain the IRS Agent's information. Contact the Agent and request your "Wage & Income Transcripts" so you have all documents filed with the IRS.
Although the IRS will usually will ask you to call "within 10 days" to set an appointment, this can be altered. Get your case in order before you meet with the IRS.
Steps for IRS Audits:
The IRS may outline the issues at the bottom of Letter 3572 but they more often send a Form 4564 or Form 886A to ask you questions. These Forms are more important because you must respond correctly or lose! The IRS often requests more information from you than they really need but you have a duty to supply properly organized evidence to win your case.
The IRS will likely want your bank accounts & income evidence but more often, they want deduction proof from you - and the burden is on you to prove your case. So, you must get your evidence in order and get legal advice.
The evidence required to prove your case can be substantial & it is more than simply a few cancelled checks or even an accounting software program. Each element has different evidence requirements and must be proven with specificity & in the format required by the IRS or your case will be rejected. Plus, the IRS will likely impose "negligent record-keeping penalties" and/or "accuracy-related penalties" on you as well. (See IRS Notice 746)
It is important to obtain attorney advice during this process. To give you the most productive attorney meeting possible we have created Prep Steps for you to follow before your confidential consultation. We then create an Action Plan for you to fight the IRS at the least cost.
But, someone must organize your records to advance your case with the IRS. You may hire a CPA, bookkeeper or attorney to put your records in order for a cost.
If you want to save money & self-prepare we have designed the Audit Defense Membership! It is wise to self-prepare, even if you hire us to represent you, since you understand your business & where various files are located.
To see how the TaxHelpPrograms work see our Advantages page!
Many times, people fear of an IRS audit because records were not kept or the records are lost or unavailable. However, unless you dealt solely in cash, bank records & credit card records can be re-created. Even if you used a lot of cash, we can get affidavits or use industry standards to arrive at a reasonable figure. See Lost Documents.
If the IRS questions relate to Schedule C or Schedule E please purchase and follow the TaxHelpAudit Business Program. If the questions relate to any other Form or Schedule please purchase and follow the TaxHelpAudit Individual Program.