The more complex your tax return, the greater your chances that you may face an IRS audit. Most taxpayers selected for an audit will receive notice by mail. If you receive a letter from the IRS about an audit, you need to respond appropriately.
Prepare for your audit right away for the best chance at a positive resolution.
Review the audit notice carefully
Your audit notice will include important details, including when your audit will happen. You will receive instructions to meet with an audit agent in person or to supply documentation digitally. Understand the expectations or call and clarify any questions that you might have.
Gather receipts and payroll records
The first thing you need to do is gather your receipts and payroll records to support your income and expense figures on your tax return. The more documentation you can gather, the better it will be for your case.
Document your credits and deductions
A key part of your audit will include validation of your tax credits and deductions. Collect any documentation you have to support those amounts. You must prove your eligibility for each of those deductions as part of the audit. Review your applicable returns line by line to ensure that you document everything.
The more documentation you can gather for your audit, the easier the process is. Keep all of your tax records for several years after the end of each filing season so that you have the information if necessary for an audit after the fact.