The IRS audits hundreds of thousands of tax returns each year. The purpose of the audit is to verify items reported on a tax return. Being prepared for an audit is the best way to survive it. You should keep all your documentation—invoices, bills, cancelled checks, receipts or other proof and calculations—for all items to be reported on your tax return in one place.
Because the IRS has three years to conduct an audit (more in some cases) and typically, the audit won’t begin until a year or more after the return is filed, it is extremely important to maintain your documentation. Don’t rely on your memory. You should be able to go back to your records and substantiate all entries on your return.
Even if you prepared your own return, it is often advisable to have a tax professional represent you at an audit. At Jennifer R Morrow CPA, PC, we have the experience, knowledge and resources to challenge incorrect or ambiguous assertions made by an examiner. The law is not always black and white. For instance, the IRS examiner may take a position (for example, to disallow a certain deduction) on which the courts or other authoritative guidance have expressed a contrary opinion. Because we know and can cite the proper authority, the likelihood of unfavorable adjustments to your tax return are reduced.
If you are facing a tax audit or simply want to improve your recordkeeping, we stand ready to assist you. Please call to set up an appointment to discuss this or any other aspect of your taxes.