By now we have all heard that the IRS is underfunded and as a result is cutting back on services and audit rates. That is one of those good thing, bad thing situations. Good that audit rates are lower but if you are selected for an audit there is a pretty good chance that the IRS has a pretty good reason.
The IRS is focusing their efforts on the audits with the highest probability of increased collections. Never forget that the IRS stands for Internal Revenue Service. Their mission has always been and will always be revenue generation; revenue meaning taxes.
And they share their findings with the state. So if the IRS audits you and finds a reason to adjust what you owe it will only be a matter of time before the State comes knocking.
When notified that you have been selected for an audit proceed carefully. Whatever information you provide can be used against you. If the amounts are large it might make sense to get a professional involved that knows how to deal with tax audits.
Steve Pingree is a seasoned tax defense attorney that knows how to deal with tax audits; especially those that might be headed for the CID side of the IRS. In case you don’t know what CID stands for it is the Criminal Investigation Division of the IRS where they carry gold shields with arresting powers and weapons. As if the IRS is not scary enough.
Please watch Mr. Pingree’s interview and learn more about the IRS audit process and what the do’s and don’ts are.