Imagine you open your mailbox to find an envelope marked with the IRS seal. Your heart races as you wonder if you did something wrong on your taxes. Did you make a mistake on your form, or something more significant? Anyone in this situation can benefit from a basic understanding of how to verify the authenticity of the audit notice and the basics of how to respond.
Step 1: Determine if the audit notice is legit
First and foremost, take a moment to confirm the legitimacy of the audit. Scams are not uncommon. Check for the following to help determine if the letter is official:
- Official IRS letterhead: Genuine IRS communications will be on official letterhead, which includes specific contact information.
- No threats: The IRS will not make threats to contact employers or immigration officials.
- Reference numbers: Legitimate notices will typically include your tax ID and reference numbers pertinent to your case.
The IRS will not text, email, or reach out to you on social media. Any of these attempts at contact are most likely fraudulent.
Step 2: Take appropriate action
Once you confirm the notification is legit, you need to understand what the IRS is auditing. The notice should clearly state the tax year under audit, specific items or claims under review, and instructions on what to do next. Review the details carefully, paying close attention to any deadlines. Failure to act by a deadline can mean you miss out on an opportunity to challenge a claim or further defend yourself.
In some cases, you may be able to handle the issue on your own. There are situations that warrant legal counsel. Three examples include:
- Questions about income reporting: If, for example, the IRS believes you have significantly underreported your income, legal guidance can be helpful.
- Multiple years under review: Counsel is also advisable if the IRS claims multiple years under audit, as this can indicate a more serious issue.
- Allegations of fraud: Any audit that includes accusations of fraud or criminal activity warrants immediate legal intervention.
It is important to handle an IRS audit notification with prompt attention. By verifying the legitimacy of the notice, understanding its contents, and recognizing when legal counsel is necessary, you can navigate the audit process more confidently and securely.