ComproTax Talks!

Without a corporation handling records on your behalf, filing taxes may not go as smoothly as you’d hoped — potentially leaving you on the IRS list of people to audit. No sweat. About.com’s authority on taxes, William Perez, is here to guide you through the ways to avoid and handle IRS tax audits.

1. Freelance Writers Are at Risk for IRS Tax Audits

In general, self-employed taxpayers have a slightly higher risk for an IRS tax audit. It makes sense: Since we work for ourselves, we might not be as diligent in keeping track of all our income and expenses as a larger corporation would.

2. You Can Lower Your Risk of an IRS Tax Audit

You can minimize the risk of an IRS tax audit by working closely with your accountant or being well-versed in tax laws – to ensure you are maintaining accurate records.

3. How to Prepare for an IRS Tax Audit

An IRS tax auditor will mail you the list of questions that s/he will ask during the audit. Work closely with a tax accountant to prepare the answers to these questions. You will need to gather receipts for tax deductions, invoices for income, and documentation of any decisions you made about how to report particular items on your tax return. If your tax return was prepared correctly and thoroughly, all the documentation you need should be in your tax folder. It will then be a matter of pulling out the necessary documentation and presenting your case to the IRS.

4. How to Meet with the IRS Tax Auditor

Not all audits need to happen face-to-face. Audits can be conducted through the mail. If the IRS insists on an in-person meeting, you have the right to send your tax accountant in your place. You don’t ever need to be present, if you choose not to be. Some geographic locations have less friendly auditors than other locations. If you are facing a particularly unpleasant auditor, you have the right to change the location of the audit.

5. Only Give the IRS Tax Auditor What S/he Requests

Keep it Simple! Stick to the questions the IRS asked in your audit letter. Don’t bring documentation that’s unrelated to those issues. That will just give the IRS an opportunity to start asking different questions. Sticking to the list keeps both you and the auditor focused on the main issues.