So you got an audit letter from the IRS.

IRS audit letter

First off, if you got an audit letter, like a 30 day notice to respond, from the IRS, you almost certainly got previous letters from them which you responded to in a timely manner, right? Please tell me you did respond to them…

Some thoughts on what to do if you get an audit letter:

1) Get the requested data to the IRS by the due date. Call them if you have questions or to ask for more time, if needed. Do not ignore it. It will not go away or get better if you do nothing.

2) Claiming Child tax Credits, Earned Income Tax Credits, and Head of Household filing status can be complex. There are many questions, things to document. Unless you know what you are doing, you should probably let someone who does it for a living do your taxes. There are numerous Due Diligence questions and if you don’t answer them appropriately, it could be a red flag for the IRS.

4) Self employment income and rental property returns get complicated too. Keep track of expenses so you can list them on the return. If the very thought of depreciation gives you hives, then mybe you should not attempt to list it on your return for a rental property or for your car if, say, you drive for Lyft or Uber.

3) If things gets really messy, go to H&R Block where I work (or any other tax service) and say you need an Enrolled Agent. They are federally authorized tax practitioners authorized by Treasury to represent and defend taxpayers before the IRS. This basically is a lawyer for tax court.

4) Don’t do dumb things like make stuff up on returns. Fraud penalties are 20-40% plus interest and there is no statute of limitations. Just saying!

Image from Taxpayer Advocate at the IRS, which has much useful information,