I'm Being Audited by the IRS!

Less than 1% of more than 145 million individual tax returns filed during 2021 will be selected for audit. The percentage increases for higher income taxpayers, along with tax returns in areas of specific interest to the IRS. Here's what you should remember if you receive a notice from the IRS of an impending audit:

• IRS computers usually flag the tax returns for audits. The vast majority of them are routine.
• Your audit will usually focus on just a few areas of your tax return.
• Audits do not automatically mean something is wrong. It is possible to receive a "no change" or even an additional refund as the results of an audit.

What to do if you are audited

• Don’t panic. Open all correspondence and respond to all requested information in a timely fashion. Remember, many of these notices are only due to the processing backlog at the IRS.
• Keep good records. Be prepared to support your tax return details. Do this as you prepare your tax records each year and store the prior year's tax return.
• Ask for help. You are not a tax professional, the IRS auditor is. Get help and do so as soon as possible after receiving your notice. Let professionals deal with the IRS as much as possible.
• The best defense is a good offense. Identify the information in question and prepare as much as possible to defend your tax return prior to any meetings with auditors.
• Answer questions, do not volunteer information. Answer only the questions under review. It helps both you and the often overworked auditor. Avoid attending meetings with an auditor on your own.
• Do not make it personal. Remember to be polite and avoid making comments about anything other than what is being asked.

If you feel you are being treated unfairly, remember there are numerous means within the system to help you such as talking to an auditor's supervisor to using the IRS taxpayer advocate service.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
We are trusted CPA advisors servicing Burr Ridge, Hinsdale, Willowbrook, Darien, Naperville, and all Chicagoland area. 

Do you need assistance with your business and/or personal tax returns? Would you like to have a trusted source for your accounting, allowing you additional time to focus on increasing your business? Do you use QuickBooks, or plan to in the future, for your accounting? We include these in all our service packages, customized to fit your personal or business needs.  
 
We are currently accepting new clients. Your initial consultation is free, so you have nothing to lose and everything to gain. Our experienced staff is available to help you streamline your accounting, giving you more free time for yourself. Set up an appointment today by calling (630) 320-3720 or email us at info@monarchaccountinggroup.com. 
 
For more free resources, such as Tax Organizers, and Record Retention Schedules, access our website www.monarchaccountinggroup.com.

Mia Verc, CPA;  Janice Papais, CPA