There are few events that cause a business owner or individual to cringe more than receiving a dreaded IRS tax audit notice in the mail. For those lucky enough to have never been through a tax audit before, a quick tax audit definition is in order. Essentially, an IRS tax audit is a review of an individual’s or organization’s tax return(s) to ensure that the financial information being provided is correct. If you have received a tax audit notification, it’s best to enlist the aid of a qualified tax professional who understands the tax code. However, there are some steps you can follow that will not only help your CPA, but also allow you to survive the tax audit unscathed, if you choose to proceed alone.

IRS Tax Audit Advice

When you are audited by the IRS, you must convince them that your income reported on the tax return(s) being audited is correct and that you are entitled to any credits, deductions, and exemptions that are in question. Consequently, the burden of proof is on you, as the taxpayer. However, you do have legal rights as a taxpayer and, armed with the right knowledge, you will be able to work more efficiently with your tax professional to satisfy all the requirements of a tax audit. Here are a few items that can assist you in your IRS tax audit:

Contact your CPA

Many tax attorneys and CPAs advise strongly against communicating directly with the IRS or representing yourself during an IRS tax audit. Even if you have nothing to hide and feel that all your tax records are in order, there is still someone at the IRS whose job it is to collect all the taxes that it legitimately can. As soon as you receive a tax audit notice, you should contact your CPA immediately and provide them with a copy of the notice and signed power-of-attorney form that will allow your CPA to handle the audit on your behalf. Most audit notices are time-sensitive, and the notice will indicate a date for when your response is due to the IRS.

Postpone the Audit

Delaying the tax audit due date whenever possible can work to your advantage and allow you to time to understand exactly what the IRS is contesting. It is advised that you request more time whenever the situation is warranted, such as when you need additional time to compile your tax return records and ensure they are in order.

Have Your Records in Order

Good documentation is the key to navigating and coming out of an IRS tax audit successful. No receipts? No worries. You can recreate records so long as they are accurate and pertain to the year(s) under examination.

Give Only the Tax Information Requested
Only give the IRS auditor the information that is requested for the years being audited: no more, no less. Oftentimes, business owners and individuals who are under audit feel that by providing additional information you will further prove your point that all your records are thorough and in order, but this could end up in the scrutiny of additional issues or tax years.

Review Taxpayers’ Bill of Rights

Before your audit, review IRS Publication 1 which explains your rights as a taxpayer. This helpful document will outline what your options are if the audit is not progressing well or you feel as if your auditor is not being fair. Don’t go by only what the auditor tells you.

Appeal the Results (if not in your favor)

Once your audit is complete, the auditor will provide you with an examination report. Following up on the IRS tax audit is always advisable if you do not understand or agree with the results. You have the right to work with the auditor or their manager to attempt to reach a compromise on any tax audit penalties. If a compromise can’t be found, you can also appeal the decision in tax court. If you decide to appeal the examination report, again, it is advisable to enlist the help of a tax professional who has experience resolving IRS audit notices.

Consider Hiring a CPA

As aforementioned, it’s strongly advised that you hire a qualified tax professional when being audited by the IRS. Notwithstanding, it never hurts to do your own research on tax law and to access the IRS website for publications and commercial tax guides related to your audit situation. Keep in mind that tax law is by far the most complicated form of law in existence, so it is not recommended that you try to handle a tax audit yourself. Consult an experienced tax professional who can advise you on how to proceed to ensure you achieve the best results possible.


If you receive an IRS audit notification, contact your Lawhorn professional as soon as possible. We can help guide you through the process.  Give us a call at 865-212-4867 or online HERE.