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How to defend against a tax audit

If you ever receive notification via mail from the Internal Revenue Service (IRS) that you are going to be audited, you will likely go through a litany of emotions. The first of those will understandable be panic. No one wants to have to prove themselves to the IRS, especially when they know they did nothing wrong. Here are some tips for defending against a tax audit.

One of the first things you need to do is respond to the inquiry sent by the IRS. Do not ignore it. If you are unsure of how to respond, you should talk it over with your accountant and your California tax attorney. They will be able to guide you in the right direction.

Once you respond to the inquiry, you need to familiarize yourself with the tax return from the year the IRS is looking to audit. Study from the first page to the last so you can answer questions and prepare documents to support the reasoning for filing the way you filed.

You need to be able to provide the IRS with a complete financial picture for the year they are auditing. For some, it could be multiple years that the IRS wants to review. Make sure you have check ledgers, receipts, financial statements, the actual tax returns, registers and any other documents the IRS requests.

To be on the safe side, you should always work with a tax attorney when being audited by the IRS. An experienced tax attorney knows the laws and how to handle audits.

It can be very stressful having to defend yourself to the IRS when being audited. If you follow the tips outlined in this post, you should have no trouble proving to the IRS that your records are clean.

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