Untitled

TIP SHEET

DO
Treat the auditor as a human being. Believe it or not, most auditors are decent people just trying to do their jobs. They are well aware that taxpayers don't like seeing them. But you don't have to bow before them, either—just relax and be yourself. Behave as you would with a boss you like—with respect and congeniality.
Stick to the knitting. You're there to discuss only the sections of your tax return in question. The more you talk about other areas or things that you're doing, the more likely the auditor will probe into other items.

DON'T
Argue when you disagree. State your case. If the auditor wants to disallow a deduction or otherwise increase the tax you owe and you don't agree, state only once why you don't agree. If the auditor won't budge, don't get into a knockdown, drag-out confrontation. The auditor may not want to lose face and is inclined to find additional tax money owed. That's his job. Remember, when necessary, you can plead your case with several layers of people above your auditor. If this method fails and you still feel wronged, you can take your case to tax court.
Be intimidated. Most auditors are not tax geniuses. The work is stressful—being in a job where people dislike seeing you is not easy. Turnover is quite high. Thus, many auditors are fairly young, just-out-of-school types who majored in something like English, history, or sociology. They may know less about tax and financial matters than you do. The basic IRS tax boot camp that auditors go through doesn't come close to covering all the technical details and nuances in the tax code. So you may not be at such a disadvantage in your tax knowledge after all, especially if you work with a tax advisor (most tax advisors know more about the tax system than the average IRS auditor).

DON'T

Argue when you disagree.
State your case. If the auditor wants to disallow a deduction or otherwise increase the tax you owe and you don't agree, state only once why you don't agree. If the auditor won't budge, don't get into a knockdown, drag-out confrontation. The auditor may not want to lose face and is inclined to find additional tax money owed. That's his job. Remember, when necessary, you can plead your case with several layers of people above your auditor. If this method fails and you still feel wronged, you can take your case to tax court.

Be intimidated.
Most auditors are not tax geniuses. The work is stressful—being in a job where people dislike seeing you is not easy. Turnover is quite high. Thus, many auditors are fairly young, just-out-of-school types who majored in something like English, history, or sociology. They may know less about tax and financial matters than you do. The basic IRS tax boot camp that auditors go through doesn't come close to covering all the technical details and nuances in the tax code. So you may not be at such a disadvantage in your tax knowledge after all, especially if you work with a tax advisor (most tax advisors know more about the tax system than the average IRS auditor).

Tips for Winning Your Tax Audit

A tax audit is always stressful. Here's how to minimize the damage

Two people with identical situations can walk into an audit and come out with very different results. The loser can end up owing much more in taxes and have the audit expanded to include other parts of the return. The winner can end up owing less tax money. Here's how to make sure you're a winner.

To read the full story on AllBusiness.com, click here.

DO

DON'T

Tips for Winning Your Tax Audit

A tax audit is always stressful. Here's how to minimize the damage

Read the Story

Make a Comment

More Tip Sheets and Playbooks