What you should know about the IRS examination process

Your rights are important to preserve against Internal Revenue Service audits and examinations. But the federal structure that grants you those rights is the same force looking to audit you. This means you have got to prepare to use every resource you have to get through the process as smoothly as possible.

The IRS may seem intimidating, but their process is set in stone and each phase needs action on your part or the part of your representation.

Information Document Requests

This is often the first notice you receive that the IRS selected you for examination and audit. In the notice, you need to enclose and send back whatever documents they request. As Forbes details, in the case of civil tax law, the IRS determination of your dues is presumably correct. You have the burden of proof to show that you are in the right.

Notices of Proposed Adjustment

This is the document the IRS may send you if they disagree with your tax return, along with any adjustments and proposed penalties. At this step, you must now defend yourself against the IRS by filing a protest for appeal.

Notices of Deficiency

This document declares the IRS examination complete and breaks down what additional tax is due and what penalties they deem necessary. If you do not file a petition against these levied penalties within 90 days, the only recourse to dispute the taxes is to pay them.

Defending your rights against the IRS is not something you have to do alone. Every phase of an IRS audit has particular timelines and requirements that may feel overwhelming, but knowing what to expect can help you pay only what you must.