by Keith Nelson

Created on: August 30, 2009   Last Updated: August 31, 2009

The first thing you need to know is who within the IRS you will be dealing with. The initial impression by this title leads one to suggest it is the Examination (Audit) division who comes calling. However, there are two even more frightening divisions within the IRS who can send shivers up your spine: Collection and Criminal Investigation. So let me address the first, the Examination division. Your return has been selected for an audit. Why couldn't it have been the state lottery commission calling to inform you that they have traced the latest, and largest lottery jackpot to a number you are holding! Your luck has just ran out.

The first step, take a d e e p breath. You are not a criminal. You have done nothing wrong, even though everything running through your mind is telling you just the opposite. Once composed, gather up your copy of the return, and all the records you have which were used in the preparation of that tax return. If you prepared and filed this return, without professional assistance, there is no need to seek representation at this point. You may not go through audits every day, but consider that is what the person you will be meeting with, does each and every work day.

The letter you received from the IRS will inform you of the areas the Examiner (either a Revenue Agent, or Tax Auditor) will be looking into. The fundamental differences between the two job titles is the complexity of the returns each examines, and where those examinations take place. Revenue Agents work the more complex tax returns, and generally work outside of the IRS office. Tax Auditors do their examinations at the IRS office. You bring your records to a Tax Auditor. The Revenue Agent comes to the records. Go through the records you have reassembled, and determine if they still agree with the numbers you entered on your tax return. If they do not, still no reason to panic. If it is just an error, or oversight, that is just the reason the IRS is auditing tax returns; to correct them.

Now the time has arrived to meet with the IRS Examiner. Be polite. Be courteous. Arrive on time, or early. Dress appropriately for an office environment. It really does no good to mention wasteful government spending, why your return was chosen when you know there are bigger fish in the sea. With very, very few exceptions, your return was assigned to the Examiner to be audited. The audit selection process is outside of the purview of the Examiner sitting in front of you. The more organized and professional you are with the Examiner, the more pleasant will be your outcome. Sure you may owe more taxes (by far the majority of audits result in additional taxes owed), but just because errors or oversights were made, it is not at all necessary to take it personally. Think of it as a business transaction.

However, if you know yourself well enough, and know that you are just too apprehensive to face the Examiner, seek professional assistance. In my experience this is best accomplished with a Certified Public Accountant (CPA), hopefully one you already know and trust. Enrolled Agents, and Attorneys will also provide this service, but again, in my experience are less effective at simple/routine audits than is a CPA.

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