IRS Audit Procedures

An IRS audit is not an accusation; it is an opportunity to verify your numbers. I make it sound so nice, don't I?

Most people do not understand how the IRS approaches a tax return for audit. The average taxpayer thinks the IRS auditor is looking for cheating and it is one thing the auditor will look for. However, the auditor is looking to verify the numbers on your tax return more than anything else. She will add up all your receipts and compare it to your deductions plus compare income to bank deposits and W-2s and 1099s the IRS has on file.

The IRS auditor will also verify that you applied tax law correctly on your return. A gift to your buddy is not a charitable tax deduction and will be disallowed if claimed. Each area of the tax return will face the similar scrutiny.

An audit is nothing to fear. It is more annoyance than anything. You can learn more by reading this article: IRS Audit Manual: IRS Audit Procedures



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