Finding out that you’re being audited by the Internal Revenue Service on your income tax return is a disheartening experience. Whether you’re dealing with this as a wage earner, independent contractor or a business, you have to ensure that you’re handling the situation in your best interests.
One thing that you need to remember is that there are very strict time limits for these matters. Trying to ignore the notices isn’t going to end well, so it’s best to act right away before you forget or too much time passes.
#1: Rights during an audit
You have specific rights during an audit. This includes knowing why you’re being audited, what the IRS needs from you, and how the information will be used. You also have the right to have someone represent you during the audit and to be treated with respect.
#2: Time limits for audits
Most audits happen within two years of the return being filed, but the IRS has three years to initiate most audits. Some serious errors could extend that time to six years.
#3: Initiation of an audit
You’ll receive written notification that the IRS is auditing your return. You’ll never be told about an audit over the phone. If you receive a phone call telling you that you’re being audited, you can be assured that it is a scam phone call.
Making sure you have someone who can help you determine the options you have for responding to the tax audit is crucial. These matters are time-sensitive so be sure you don’t wait too long. Your options might be limited if too much time elapses.