Most individuals know the IRS as the tax collector. However, this is not entirely accurate; the IRS is much more involved in our daily lives than meets the eye. For instance, did you know that the IRS is responsible for notifying you that you have been selected for an audit? How about the fact that the IRS verifies your social security number before issuing a social security card? Or that the IRS requires all employers to verify their employees’ work status?
Most individuals are often surprised to learn that the IRS is responsible for a variety of functions. While it is true that the IRS collects taxes, it also issues birth certificates, verifies social security numbers, protects consumers from credit reporting errors, detects and prevents fraud, and conducts undercover investigations. In fact, the IRS is so involved in our daily lives that it has its own slogan: “Just because we collect taxes doesn’t mean we know everything.”
If you are unaware of the countless ways that the IRS impacts your life, this article is for you. Here, we’ll discuss how the IRS notifies you that you have been selected for an audit and what you can do about it.
IRS Audits Begin At Personal Service Enumerations
As a citizen, you may be more accustomed to the IRS sending you a postcard reminding you that you have a tax bill to pay. However, according to the IRS, this is not how audits start – at least not primarily. As of April 1, 2018, the IRS will begin audits at the individual, personal service level. This means that they will examine your tax returns and ask you questions about them.
While this may not seem like a bad thing, recall that the IRS is already responsible for identifying and questioning individuals about their tax liability. If you’re already feeling overwhelmed by the additional duties that the IRS places on you, this may be the last straw. After all, you’re already going to have to find the time to study the postcards and paperwork that the IRS sends you. Why add more to your already hectic life?
However, since the IRS will only begin auditing individuals, it does mean that there is still hope for the rest of us. If you are an organization that receives a large amount of money, you may have to pay taxes regardless of what your accountant tells you. In this case, the IRS is going to have to examine your returns, and this is when it gets interesting.
What Can You Do About An IRS Audit?
If you’re undergoing an IRS audit, there are a few things that you can do to prepare. For one, you need to make sure that you have the correct information on hand. While the IRS is responsible for sending you notices that you are being audited, it is ultimately your job to respond satisfactorily. Thus, you need to ensure that you have the correct information for the IRS, your accountant, and any other tax-related business. Remember, if you do not understand what the IRS is asking you, do not hesitate to ask for clarification. There is no reason to assume that your accountant knows everything about tax law. You will both need to study together to ensure that you have answered all of the IRS’s questions correctly.
You also need to be aware of what to expect once the audit has begun. Like most government agencies, the IRS tends to be inefficient and rather disorganized. As a result, the IRS is usually very slow in getting paperwork and responses back from taxpayers. In other words, once the audit has begun, you are going to be in the same boat as everyone else, waiting for your turn to be questioned.
Finally, just because you’re being audited by the IRS does not mean that you’re necessarily guilty of any wrongdoing. According to the IRS’s own website, ‘more than 99% of all audits are done without finding any intentional wrongdoing on the part of the taxpayer’.
If you are chosen for an audit, the IRS will begin by asking you a series of questions about your taxes. However, you must be careful to provide only the correct information, as providing false information may result in you being found guilty of a crime. Furthermore, as you are the only person who can provide information regarding your income and expenses, it is critical that you do so truthfully. Make sure that you have all of the necessary documents and that you answer all of the questions asked by the IRS completely and accurately. You should also seek professional legal aid in the event that you are not sure of how to answer certain questions. Remember, the IRS is not your enemy – it is simply doing its job. Hopefully, this will all be over soon and you will never hear from the IRS again. However, if that does happen and you do find yourself in need of legal help, you will have the best attorneys in the country at your disposal.
What the hell is an IRS audit? Why do I have to go through this crap? It’s not like I’ve ever done anything wrong. All of this stuff about taxes is crazy. Am I supposed to feel guilty about not paying taxes? Am I going to lose my job? Fuck this whole thing. I’m not feeling so great about myself right now. I think I’ll just go on vacation, see my family and have some quiet time alone. That’s what I deserve after all this stress. I mean, I work hard and pay my taxes. What’s wrong with that? Screw this IRS nonsense. I’m going on vacation.
As you can see, there are a lot of negative feelings that you might have regarding the audit process. While it is true that you are going to have to find the time to study and prepare for your audit, this is definitely not something to look forward to. Nonetheless, you must remain calm and composed as much as possible. Do not get yourself into a panic until you have actually been given an opportunity to answer questions. Furthermore, regardless of how you feel about the IRS or the whole audit process, you must remember that it is still the IRS’s job to question you and it is still your job to answer. So, instead of voicing your frustration, take a deep breath, continue doing what you’re doing, and try not to worry about what is going on. In other words, when in doubt, don’t panic, and do your best to remain calm. Everything is going to be alright. You may even learn a thing or two about taxes and the IRS during this process.