One of the most painful experiences that an individual can go through is an IRS audit. It is worse than getting a tattoo, giving birth, and receiving a root canal combined. This is probably because the IRS agent charged with handling the auditee’s account will be prying into nooks and corners of the person’s life that gynecologists or dentists have no need or desire to go. Audits can happen to people via a variety of reasons – attempting fraud, honest mistakes when compiling their returns, poor documentation, clerical errors, or even mistakes on the government’s part. Regardless of the reason, there are certain steps that should be taken by anyone preparing for an audit:

Document, document, document – This cannot be overstated. Do not allow yourself to be surprised by the IRS agent. Instead, be two steps ahead of them. Know your records like the back of your hand and have answers to any questions that you expect to be asked before they are asked. At the same time, it is wise not to volunteer any records that are not demanded. This can just lead to greater confusion and possibly even open up areas of your finances to scrutiny that were being ignored previously. Most professionals would recommend having records and receipts that go back anywhere from three to five years.

Consider representation – This depends more on what you are looking at. If it is a simple mistake or a possible clerical error, it may just be easier for the process and on your wallet to go the audit alone. However, if you are looking at serious allegations and possibly even fraud, you will definitely want some help to get through the audit and minimize any potential penalties. That is not to infer that only the guilty need accounting (or legal) representation, only to say that individuals should give greater thought to getting help for their audit as the stakes increase.

Stay calm – At the end of the day, everybody involved in the process is a person. The IRS may be a soulless organization that exists only to make our lives as difficult as possible (not really), but the people being audited will not be dealing directly with the organization, they will be dealing with a human representative. Getting upset and angry at this agent will not help the situation and may even make it worse. Just because you are having your whole financial life probed in ways that you never thought possible does not mean that you can’t be civil about it, right?

IRS audits are not enjoyable experiences. However, they are not the end of the world either. Most people who go through the audits live to tell (and complain) about them after the fact. Take it step and by step, understand your situation, and remain calm throughout the process, and you will most likely be one of the survivors. All that said, if you get offered the choice between and audit and a root canal, I recommend the root canal.

Author Bio: By Felix Chesterfield; For more information on retail audit and other types of audit, please feel free to follow the link provided. Thank you for reading.

Category: Advice
Keywords: Audit, IRS, retail audit