Navigating an IRS Audit: Key Steps and Essential Preparations (Full Transcript)

Speaker 1: What to expect during an IRS audit. If you've been selected for an IRS audit, you will have received the audit notification that tells you what items are being audited. You will have received Publication 1 that gives you your rights as a taxpayer. You will have received an information document request that tells you what exactly the IRS is looking at and what specific items and receipts you should be bringing to the audit yourself. When you first go into the IRS audit, they're going to ask you a series of questions. You need to be truthful, honest, and answer the questions. Answer the questions completely, but you don't need to go into long details about it. You just need to give the answers that have been asked. The other thing is they will have a copy of your tax return. They should actually have the original tax return that was filed. They may ask you to bring in copies of other years' tax returns, which you might do at the initial meeting or you might wait for a subsequent follow-up meeting. Typically, you wouldn't take those into the first meeting, but sometimes you would. The other information that they're going to ask you to bring is your receipts. So once you go through the initial interview process where they ask you questions, then they're going to ask to see the receipts and documentation for the items that have been selected during the audit process. Depending on the depth of the information that has been selected for audit, could determine whether they go through each and individual receipt used to substantiate all of the expenses or whether they pull a sample and just look at selected receipts. If those receipts are not available or you haven't brought everything that you needed to to the audit, then a subsequent follow-up meeting may be scheduled. You really want to do your best to make sure that you bring all the information that has been requested to the initial audit meeting. If your audit can be resolved and closed at the initial meeting, you may or may not have additional years open and expanded on the audit, but it is in your best interest to try to have their audit resolved at the initial meeting. Again, make sure during the interview process that you give complete, full, and accurate answers, but you do not have to divulge additional information and make sure that you've brought all the receipts and backup for the information that have been selected. They will be going through those. If you can have them meet and orderly, it's to your advantage. And if you're missing receipts, you don't have to divulge those, but make sure that you have everything that you have been able to get at that time. If you feel like you can get more information, but you just did not have time, then ask for additional time to submit the additional documentation. If at any point during the audit you feel uncomfortable and would desire to have representation during the audit, you can ask that the meeting be adjourned for you to seek representation.