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How should you prepare for an IRS audit?

On Behalf of | Nov 16, 2021 | Criminal/Civil Tax Litigation, Federal And State Tax Collections, Tax Controversies |

You received a notice in the mail that the Internal Revenue Service intends to audit your taxes. Now what?

Having the records to support your return organized and ready may help you resolve the issues quickly and favorably.

Financial records

According to the IRS, a tax audit will review the income, credits and deductions claimed on your tax return. To support these claims, the IRS may ask you to submit receipts, bills, canceled checks and other financial documents. Along with your documents, it benefits you to include a summary of the transactions, which should include details of how they relate to the specific claims on your returns.

Legal documents

To review certain claims, the IRS also sometimes needs legal records. For example, this may include property acquisition documents, divorce settlements and custody agreements, and civil claim documents. With such records, you should include a description of the case and its connection to your tax credit or deduction.

Employment and other records

If you claimed credits or deductions relating to employment or other factors, the IRS will likely also want to see documentation to support your return. To this end, you may submit copies of records such as continuing education requirements, or dress codes and uniform policies. You may also give the IRS copies of logs or diaries showing the dates, locations and purposes of business travel or job-hunting activities.

Notice of an audit by the IRS may cause uncertainty and fear. However, using the documentation you used to create your tax return, you may support your claims and avoid any further issues.