Whether the IRS is auditing you or you're trying to work out a payment plan on a tax bill, meeting an agent face-to-face can lead taxpayers to make serious missteps.
Ron Alban, an Anchorage CPA gave guidance for this list.
But first, what kinds of things prompt IRS inquiries on tax returns?
There are multiple causes of an IRS inquiry. Some are: unreported income that should have been reported, bad math on the returns, bad ratio of income to expenses taken, or failure to file a return.
Some people who are more likely to be audited: Self-employed people taking large travel expenses or home deductions, those with high wages, or cash-based professions like hair stylists.
Now for the rules:
Don't Ignore IRS Inquiries
Rule 1: Don't ignore the tax man. The IRS has an automated collections system.
They begin by issuing notices; Each notice gets a little harsher.
If you ignore those notices, in the end, the IRS may place a levy on your wages or bank account.
Share Only Specific Information; Don’t Expand Discussion
Rule 2: Communicating with the IRS should be done with care.
That means, answer their questions, but only answer their questions. Don’t tell them more than necessary.
Sometimes, taxpayers get defensive in the interview and share more than they should.
Rule 3: be respectful in an interview with an agent. Try to maintain emotional control. You want this person to be on your side.