We get it. Tax audits can be nerve-racking, to say the least. And while there is a lot of information out there on what is appropriate to do, there isn’t much on what not to do. So allow us to outline some of the things you should never do during an IRS audit.
1. Don’t lie or submit false documents
This is one that should go without saying, but you’d be surprised. Lying to an auditor or submitting false documents could be considered criminal conduct. Just because you are being audited, it doesn’t necessarily mean the auditor is looking for fraud or criminal conduct, so don’t give them any reason to find any by lying or submitting false documents. Just be honest and forthcoming with whatever they ask for and the whole thing will be over shortly.
2. Do not be rude, unprofessional, or fail to cooperate
While it is fully acceptable and advisable even to have an attorney present, you should never be full-on uncooperative with the auditor. There is no need to be hostile with them or uncooperative. They will be professional with you and although the situation is an unpleasant one, at the end of the day, the auditor is just a person doing his or her job and you need to remember that. The nicer you are to them, the better the audit will go for you.
3. Do not do the government’s job for them
While it is very important to be courteous and professional with the auditor, you should also remember they are working for the government. So while you do have to substantiate many of the items on your return, the burden of proof of any wrongdoing is on the government’s, so don’t give them any reason to investigate you.
4. Don’t make unnecessary remarks or say more than is asked of you
With that in mind, and in the same vain, you should also be careful with what you say. Don’t say more than what is asked of you. Making offhanded remarks that are not in response to what has been directly asked is simply foolish. Every time you open your mouth, the auditor learns more and more about you. Even if you think that what you said was harmless and completely innocuous, it can cause the auditor to expand the audit based on something they may have interpreted from your remarks. So just stick to what is asked of you and nothing more.
5. Don’t pass up the opportunity to ask the auditor questions about what they are doing, should be doing and why.
As a taxpayer being audited, you have every right to ask questions where you see fit. You are not a push-over so don’t act like one. Just because an audit may feel intimidating or daunting does not mean you should feel powerless. Speak up. If you are unsure about what is going on or where the auditor is finding support for their decision, ask them. That way, if you feel that they are in the wrong, you can open up a discussion about it.
6. Don’t give the auditor original documents.
I cannot stress this enough…make copies of everything. You’ll be glad you did. And whatever you do, do not give the auditor original documents. The chances of you ever getting those back are slim to none and even if you do manage to get them back it will only be after you have asked and asked and months after the audit. It is completely acceptable for you to give them copies of originals and you should definitely do so. You should store all of your original documents someplace safe and keep copies handy.
7. Don’t appear before an auditor without an attorney
This is actually the single, most-important piece of advice I can offer you. Just as you would never speak to a police officer without an attorney, you should definitely have an attorney present when being audited. Tax attorneys know the ins and outs of all the tax laws and they know the IRS manual backward and forward – the good ones do anyway – so they will know when the auditor is looking beyond his or her scope of authority and how to put a stop to it. Tax lawyers also know all of the tax loopholes and various exceptions to the laws so they can better fight for you.
There you have it, a list of things not to do during an audit. Follow these simple guidelines the next time you or someone you know is being audited. They could save you a lot of trouble and needless headache.
Contact an IRS audit attorney
If you are being audited or just need legal advice from an experienced tax attorney contact Ayar Law at 248.262.3400 for your free, confidential consultation.