How long does an IRS Tax Audit take?
An IRS audit is an examination of a tax payer’s account to ensure that there is accuracy between the real situation on the ground and how the information was reported. The IRS also calls for tax audits to ensure that the taxpayer filed their returns correctly.
Generally, the chances of a taxpayer getting audited are really low, less than 2 percent. The chances, however, increase as your income increases.
The IRS usually has up to three years to audit an account. If you have received a notice from the IRS that you are under an audit, you can either choose to panic or be prepared. Hopefully, you choose the latter, in which case you need to be enlightened with the right information.
Although the IRS has 3 years to audit and account, most IRS audits are completed within a year.
Unless you have intentionally done something fraudulent and you’re trying to slip by the IRS, you have no reason to panic when you’re notified about an audit. First, you should know that you have certain rights when you are being audited by the IRS. They include:
- You have the right to professional and courteous treatment by the IRS and its employees.
- You have the right to the privacy and confidentiality of your tax information.
- You have the right to be given access to knowledge about why the IRS is asking for your tax information, how they will use the information, and what happens if you fail to give them the information.
- You have the right to self-representation or to be represented by an authorized individual.
- You have the right to appeal the verdict both within the IRS and in court.
Ideally, you should keep all your tax-related documents for up to 3 years.
A few documents you should always have ready in case of an audit include:
- Receipts: To prove what you spent your money on.
- Legal papers
- Employee documents
- Theft or loss documents
- Medical reports
- Loan agreements
If you do not have any of these documents anymore, you can simply get a copy of it. If you are still unable to do that, then the deduction for any receipt or document you can not provide will not be allowed because you can not substantiate it.
If at the end of the audit, if you are lucky, you will get a no change notice which means that you do not owe any extra tax but if it is discovered that you owe money, you will get a bill in the mail which you’re expected to settle within 30 days. If you are unable to pay the full amount upfront, then you can contact the IRS to discuss further payment options.
IRS audit notices usually come through mails. What you need to do is take a look at the mail they sent and see what part of your returns they will be focusing on and decide if it’s something you want to face by yourself. If not, it makes sense to get help from a qualified and experienced tax professional.
We are a tax relief firm dedicated to giving you the best results regarding resolving your tax debts. Our team of qualified professionals is available round the clock to provide you with the assistance you need. Contact us now at 888-585-8629 or 617-430-4674 or send us an email at [email protected].
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If it is a correspondence audit, all you need is to gather all the information that the IRS is asking for and send that back to them. Generally, you are required to respond to an audit notice within 30 days.