Consider this scenario: You are under audit with the IRS or the Franchise Tax Board and are thinking about representing yourself. I suggest you think again. As a former IRS agent, I found that some of the easiest adjustments came from individuals representing themselves. Simply put, I would ask questions and then listen to responses. Within the first 15 minutes, I would have enough information in my arsenal to make the person turn over some more tax dollars.
I remember the contractor whom I visited at his on-site office location. As I walked through the office, I saw a computer and said, "Nice computer." The contractor responded that he never really knew how to use the computer except for playing games. Unknowingly, this contractor just admitted that he was not entitled to $3,000 worth of deductions.
In case you are still set on representing yourself, I suggest these strategies for handling an IRS audit:
Understand the procedures for IRS audits as well as appeal procedures.
Do not volunteer information to the IRS and pretend to be helpful.
The IRS will be focused on certain items in your return. Stick with the issues under audit and provide the agent with proper documentation for the expense or income item claimed.
Do not allow the IRS to go on fishing expeditions into areas that fall outside the audit.
If your return was prepared wrong, discuss the situation with a qualified professional. We all make mistakes. If the mistake was innocent, admit the mistake and go on.
Greenstein, Rogoff, Olsen
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