July 22, 2019
What does it mean to get audited by the IRS?
Opening up your mail to find a letter from the Internal Revenue Service (IRS) likely leads to stress. Unless you are expecting a tax return in the form of a check — that is likely the only time anyone is excited to get a mailing from the Uncle Sam.
For those of us in the former category, the mailing could be a notification of an audit. Is it legit? What does it mean? What is an audit? What should you do? This post will provide some guidance by answering these questions.
Question #1: Is it legit?
If you got a mailing from the IRS, it is likely the real deal. It is important to note this agency is unlikely to contact taxpayers through phone calls, email or social media. Any contact made through these methods is suspect and could be the work of a hacker.
Question #2: What does it mean?
The exact meaning will depend on the language of the letter. In most cases, the IRS needs to review your tax filings. It may have questions about claimed income, deductions, or credits.
Question #3: What is an audit?
An audit is defined by the IRS as a “review/examination of an organization’s or individual’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.” Basically, it’s a review of everything you put into your tax returns.
Question #4: What should you do?
First, do not panic. Audits can range from very simple, needing minimal clarification on your part to more complex. If you believe your return may include complex issues, like questions about business ownership, foreign assets or benefits from trusts, it is wise to seek legal counsel to better ensure your rights are protected