An IRS
audit is initiated if you are presumed to have filed an in accurate
tax return. After all, the IRS won’t be spending precious time and
money to come after you if they believe you are clean.
So how do
you combat that assumption of guilt even before you’re audited? The
answer is to be credible. As you may well know, credibility comes
with what you do, not what you say, and in the world of IRS audits,
credibility is all about being organized.
You don’t
want to blindly sift through your box of receipts, and neither does
your auditor. Unfortunately, someone has to do it, and better you
than the auditor. Take the time to organize your receipts so the
auditor doesn’t have to.
If you
can, categorize your receipts accordingly. Create a separate folder
for your home expenses, another one for subcontractor repairs, and
another one for your contributions to nonprofit organizations.
If
possible, mark your receipts to explain further the expense it refers
to. For example, if you entertained a client for business, mark the
name of the client, and explain why.
An IRS
audit is all about making a good impression on your auditor. If your
efforts fail to impress, be sure to contact an IRS tax lawyer
immediately.
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