Although those who have gone through an audit exam may disagree, auditors are human beings. Well, at least we have found that most of them are.
Are you aware that the most important factor that may determine the course of your audit exam could be the auditor assigned to your case? While all men and women may have been created as equals, not all auditors are equal with their knowledge of the tax law and auditors can vary significantly with respect to the zest for which they implement IRS policies and procedures.
There are auditors that are very knowledgeable about the tax law and want to make sure that the taxpayer prepared its tax return reasonably correct. If the taxpayer has made a reasonable effort to substantiate his deductions, the auditor is satisfied. If only all auditors fit this profile.
There are those auditors who believe that most taxpayers are tax cheats and want to make sure that every penny of tax due is collected. If that means demanding documentation to support every single deduction regardless of the dollar amount involved, so be it.
The IRS likes to occasionally rotate its auditors. You may have been assigned an auditor who was examining corporate tax returns for the past five years and is now doing his first individual income tax audit. This is just one example of the possibility of being assigned an auditor who lacks the proper training and tax experience.
You could be assigned an agent who is close to retirement and isn’t interested in having his cases contested by the taxpayer and isn’t concerned about whether his supervisor thinks he did a thorough audit exam. On the other hand, you could be assigned a young, eager auditor who wants to make an impression on his supervisor and is overly aggressive with his demands for support.
Working with various auditors over the years, we have learned that the personality of the auditor must be quickly identified so that the proper personal behavioral techniques are used when dealing with the auditor. In addition, it is important to be professional at all times, even if the auditor is not. When taxpayers represent themselves during an audit, they often become emotionally involved and can be perceived as confrontational by the auditor.
The IRS has issued Publication 1 titled “Your Rights as a Taxpayer”. While this publication is not very detailed, it does state that the IRS must treat the taxpayer in a professional, fair and courteous manner. Thus if the agent is making unreasonable demands, the taxpayer or the taxpayer’s representative has the right to meet with the employee’s supervisor and others within the IRS to ensure that the taxpayer’s rights are not being abused.
Keep in mind that the majority of auditors are working to the best of their abilities and are simultaneously handling a multitude of cases. They want to close each audit as quickly as possible. If treated professionally and provided the information they need to satisfactorily document their audit papers to the satisfaction of their supervisor, the audit process can move reasonably quickly and with satisfactory results.
Remember that having the proper documentation is how to avoid audit assessments. Thus the key for properly preparing for an audit is when the tax return is prepared and filed, not when selected for an audit exam. We recommend that you always consult with an experienced tax professional immediately upon receipt of an audit examination notice.
We invite you to call 610-594-2601 today to make an appointment to discuss your business and any audit concerns that you may have. You can also schedule a free consultation at Click Here. To learn more about various tax and business services, visit Tax Preparation Services and Small Business Accounting Services
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