Using The Fall Season To Prepare For An IRS Audit In The Upcoming Year

As the year winds down, fall offers the perfect opportunity to take stock of your financial records and get organized for tax season. In this article, we break down…

• Red flags to address before an IRS audit to reduce your legal risk.
• The documents you’ll need to gather to prepare for an audit.
• How an attorney can help you enter the next tax year confidently.

Why Is Fall The Best Time To Prepare For A Potential Audit?

Fall is an ideal time to start organizing your financial information. Collecting bank statements, receipts, and other key documents now means you’ll have everything ready when it’s time to prepare your next year’s return. Taking these steps early helps ensure accuracy and prevents a last-minute scramble when tax season arrives.

What Documents Should I Gather And Organize Now?

Begin by gathering:

• Bank statements
• W-2s and 1099s you’ve received
• Receipts for any deductions you plan to claim
• Any supporting documentation that could be used to prove expenses or income later

Keeping all of these materials in one place makes it much easier to verify your return if questions arise in the future.

What Potential Red Flags Should I Address Before The IRS Contacts Me?

If you realize you’ve overstated deductions or understated income, it’s best to proactively address the issue. The right approach is to acknowledge the error and, ideally, file an amended tax return before the IRS contacts you. This demonstrates good faith and can often help minimize penalties or further complications.

Should I Prepare For Both Federal And State Audits?

Typically, when one agency, whether federal or state, conducts an audit, it shares the results with the other. If you owe additional taxes after one audit, it’s very likely that the other agency will be notified and may conduct its own review. Preparing for both ensures you’re covered no matter where the audit originates.

What Can I Do Today To Make Next Year’s Tax Season Less Risky?

The most important step is to be truthful and accurate. Don’t overstate deductions or invent expenses, and don’t underreport income. Keep detailed records of the data you use to prepare your return, and store them in an organized manner. Good recordkeeping is one of the best defenses against audit issues.

Should I Hire A Tax Attorney Now, Even If I Haven’t Been Contacted By The IRS Yet?

There’s no need to hire a tax attorney before you’ve been contacted by the IRS. However, as soon as you receive an audit letter, you should reach out to an experienced tax attorney right away. They can review the letter, identify exactly what the auditor is requesting, and guide you through addressing those specific issues efficiently and correctly.

Still Have Questions? Ready To Get Started?

For more information on IRS audit preparation tips, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (864) 271-7940 today.