Lawrence Lawler: Hello! I am Lawrence Lawler, National Director of the American Society of Tax Problem Solvers. This series is on how to prepare for an IRS audit. Today, we are going to discuss the office audit where you actually appear in person before a revenue agent or possibly a tax compliance officer. There are various titles of the IRS heads for their office auditors, but basically, what it boils down to is you are going to be subject to an examination by a live person in the IRS.
This is not a correspondent's office where you mail things into them. You are in person, sitting down with the auditor who is asking you questions and for that reason, you might want to be represented. We generally, in fact, recommend that our taxpayers don't accompany us to the audit but they have us go in their place.
That way we can get the questions from the auditor and tell them if we don't know the answer to it or if we just don't want it answered at that moment, we'll get back to them with an answer to that particular question. It gives us a little more time to make sure we compose the right answer and we think through what they are getting at.
IRS auditors are very well-trained and they understand how to ask someone questions through listed information that perhaps if it's not stated properly could cause you a problem that you really shouldn't have. The most important thing for you to remember when it comes to the audit in person, if you are going to go on your own or if your representative is going to go to make sure to arrive on time with organized records and understand that this is a serious undertaking. So you don't want to go in there feeling like just because they are nice people and they are friendly to you and they will be. They are not your friend that is not why you are dealing with the IRS. Be polite, considerate, and confident and that's the type of a representative you should have as well. The only items you should take with you when you go to an in person audit at the IRS are the items they've asked for.
Do not take all of your records, in case they want to see them or whatever else; stick to business, get the job done and get out of there as quickly as you can, being well-organized leaving copies if the auditor wants them. Make sure that you take copies with you. If they ask for additional information, be sure that you follow up quickly with the requested information.
When they all are finished, when it's all set and done, they will put together a report for you. Once they send you that report, you can either agree or disagree with the report. If you disagree and you can provide additional information to help convince them to change their position that's on that report, certainly, advise them of that, don't agree to it and send them the additional information.
That's you best bet. If in fact, you have already exhausted everything that you have in the form of information to give them and you still disagree with them, remember, you do have the right to go to Appeals from an audit and you can deal with an Appeals officer who will be an independent party who is not familiar with either side of the case and he will determine whether or not your position is valid.
So you have a pretty good idea as how to handle yourself when it comes to doing an office audit. Many of those topics will apply when it comes to doing the field audit which we'll discuss next.