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How to prepare for a tax audit

| Feb 15, 2018 | audits

Maryland residents may be in the process of collecting information to complete their tax returns. Ideally, an individual will take as many deductions and credits as possible. However, it is also important to understand what happens if the IRS decides to audit a return. In an average year less than 1 percent of returns are selected for further scrutiny. In 2017, there were slightly more than 3,000 criminal cases according to an annual report from the Criminal Investigation Division.

Those who have their returns audited have the right to schedule an in-person interview if it isn’t feasible to mail or fax records. In most cases, the IRS only needs information related to specific items on a return, and this may be done by mail in many cases. In the audit letter, the IRS specifies why it is taking place and what information a taxpayer needs to produce.

Taxpayers should know that the IRS will only contact them by mail. Those who are contacted by phone or email by an entity claiming to be the IRS is almost always a scam. After the audit is finished, a return may be processed after information provided by a taxpayer is verified. The IRS may also propose changes to a return. An individual may choose to agree with the changes or appeal the ruling.

Those who find themselves to be the subject of a tax audit may not want to face the government alone. They have the right to have an experienced tax attorney handle the audit on a taxpayer’s behalf. This might produce a more favorable result.