Tuesday, May 25, 2010

Preparing for an IRS Audit

Old accountants say, "You win an IRS audit before you ever meet the auditor." And it is true. Your preparation work for the audit determines the tone of the audit and the outcome in most cases.

Gathering your information in advance and adding receipts together shows you where you stand. Weaknesses in your records are now clear to you, but not to the auditor. You can guide to a limited extent where the auditor looks.

Addressing lost documents up front can work to your advantage. If the auditor discovers something while working through your papers, you can have serious problems.

Never throw a stack of paper at the IRS auditor. Have everything gathered together in paper clipped piles. This way you only provide the information you want or the IRS requested. Why give the IRS extra information to use against you.

Read more about preparing for an audit here: The IRS Tax Audit Process: Preparing for the Audit




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