For Texas business owners, the idea of a tax audit may sound like a nightmare. Tax time brings feelings of anxiety to most people. An IRS audit is simply a review of a business or individual’s financial and account information. The point behind the audit is to ensure that the information provided is correct and that the business or person followed the tax laws. If selected for an audit, this does not automatically mean that the person broke the law or that there is a problem. In fact, it may simply be random selection.
According to the IRS, you only receive notification of an audit through the mail. The IRS will never conduct an audit over the telephone. Next, the IRS will continue the process via mail or will schedule an in-person interview to review the records. You will find the contact information for the IRS in the letter and instructions on how to continue the process. You may have the interview at an IRS office, an accountant’s office, place of business or you may even have it in your own home.
If conducted by mail, the IRS will request additional information. This information may include:
- Itemized deductions
Now, if you have too many records that it would be too costly to mail, you may consider an in-person interview. The IRS will request some electronic records or other specific documents. By law, you are supposed to keep all records for tax returns for three years. Most audits will involve returns within the last two.
All tax audit information is strictly for educational purposes and is not legal advice.