 Many of us have the fear that the IRS may someday send us a letter saying they will
be performing an audit. The word itself can cause heart-ache in the months
leading up to tax time. Our tax deductions can save us money, but they should
not get us into trouble. What can cause an audit, you may be asking. Does the
government do this randomly? Is there a way to not be audited?
Learning to Move
with Your Partner
When we dance, we must also work with a partner to develop graceful,
fluid movements. We rarely equate taxes with dancing, but when we think of the
dance we do on a yearly basis to save money on taxes, then the metaphor works.
It works well actually. Our arrangement with the government works. We agree to
pay our percentage of income to the betterment of our society, and they agree
to provide us with general services, as well as protect us against unknowns. We
have a good partnership, and like any longstanding relationship, we have
learned to move amongst the other without upsetting them.
Learn the Tax
Audit Dance Steps
A Tax Audit often times occurs due to discrepancies between tax
years-an unexpected lean year among several fat ones. Something like this may
trigger the powers that be and down comes the hammer. Of course, audits can be
relatively painless. How often have you gone to the dentist and realized the
pain wasn't that bad? The same can be said of an audit. Heck, you might even
learn something.
Just in case, let's ensure your visit with the IRS goes off without
any problems.
5 General Tips
(Dance Steps) to Help with a Tax Audit
Retain proof, including receipts, contracts, documents, and checks for
up to seven years.
Hire a lawyer if the tax situation appears convoluted. We cannot know
how to fix everything. Trained professionals can assist us with the dirty work
of an audit.
Do not agree to demands of the IRS without consulting an attorney. Too
often our sensibilities get wracked by thinking of time and energy. By not
agreeing immediately, you leave yourself a chance to wiggle.
Choose the place to hold the audit where you feel comfortable. Having
the auditor in your work environment might not be the best place. Often time's
auditors will meet with you at your accountant's office.
Do not argue with a tax auditor. The end result cannot be good for you
or your finances.
These things may be helpful when dealing with an IRS tax auditor. The
tax auditor's purpose is to review your claims and validate your forms. The
process can be lengthy and frustrating to many people. The end result cannot be
too bad though. Auditors are humans too. They live and breathe the same as the
rest of us. The tax breaks we thought were questionable they may not even
glance at for more than a second.
Missteps in our
Audit Routine
We have no time to rehearse. An audit can come with no notice. For
this reason, we should remain organized with our tax documents. If we had
write-offs, then we should have the files handy that back up those claims. We
may be our own worst enemy in an audit. We should let our accountant speak on
the tax breaks we used and other ways we found to save money on our taxes. We
may not explain things the best way. And the last thing we should want is to
irritate a tax auditor.
We can learn to dance with the laws of the land or we can be
unscrupulous and pay the consequences. While we may not boost the money we save
on taxes, following the rules, keeping quality records, and maintaining good
relations with the auditor can help us to save time and money. The best tax
break might be to not have an audit in the first place. But if we do encounter
the trial of an audit, remember to look at it through the perspective of a
learning experience. The valuable information learned about taxes during that
time can ensure the experience never happens again.
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