Every year, quite a few Connecticut residents find out the Internal Revenue Service is auditing them. Those who are facing tax audits will receive notification in the mail. Within that notification is a lot of information about what is needed to review one’s case and how to contact the agent assigned to one’s case, but it typically contains little information about the actual audit process. For this reason, it seems appropriate to share what one can expect when being audited.
After receiving an audit notice, the taxpayer will discover the overall process can be completed in several ways. The most common method of dealing with an audit is through correspondence. This is where the IRS and taxpayer address the matter through the mail. However, it is possible to meet in person at an IRS office or in one’s home to discuss the situation.
The audit letter will describe the problem and what is needed to resolve it, and it will also provide a deadline for responding to the request for information or making a payment. One can either pay what is allegedly owed or submit the documentation needed so further examination can occur. If documentation is provided with a correspondence audit, it can take weeks before one hears back from the agent. With an in-person tax review, information is shared then and there, so decisions can be made on the spot. In the end, one will either walk away from the audit unscathed, will have to pay more in taxes and penalties, or will receive a refund.
Connecticut residents are not required to go through tax audits alone. They also do not have to accept the final decision. Those whom the IRS says owes more in taxes, interest and penalties have every right to appeal. Whether one is just beginning the audit process or wants to appeal, legal counsel can be there to help someone do all that is necessary to achieve the best possible outcome.