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How to Handle an IRS Audit Effectively | Expert Tips & Help

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How to Handle an IRS Audit Effectively: A Guide for Edmond, OK Residents

Understanding an IRS Audit and How to Respond

Receiving an IRS audit notice can be stressful, but knowing how to handle an IRS audit effectively can make the process much easier. Whether you receive an IRS notice regarding discrepancies in your tax return or a full audit request, it’s essential to stay calm, understand your rights, and take the appropriate steps.

At Roger Ely CPA, we specialize in helping individuals and businesses in Edmond, OK, navigate tax complexities, including audits. Here’s everything you need to know to handle an IRS audit effectively and how our firm can assist you in the process.

What Is an IRS Audit?

An IRS audit is a review of your financial information to ensure your tax filings are accurate and comply with federal tax laws. Audits can be triggered by errors, inconsistencies, or random selection. The IRS typically conducts three types of audits:

  • Correspondence Audit – Done via mail, requiring you to send documents to verify specific items.
  • Office Audit – Conducted at an IRS office where you present your records in person.
  • Field Audit – The most comprehensive type, where an IRS agent visits your home or business.

What to Do If You Receive an IRS Notice

If you receive an IRS notice, don’t panic. Many notices are simply requests for more information or minor corrections. Follow these steps:

  1. Read the IRS Notice Carefully – Identify the issue, the tax year in question, and the deadline for a response.
  2. Compare the Notice to Your Records – Check your tax return and supporting documents for any discrepancies.
  3. Respond Promptly – If required, provide the requested information before the deadline to avoid penalties.
  4. Do Not Ignore the Notice – Failing to respond could lead to additional fines or a full audit.
  5. Contact a CPA for Assistance – If you’re unsure how to respond, a tax professional can help ensure accuracy and compliance.

Steps to Handle an IRS Audit Effectively

Step 1: Stay Calm and Gather Your Documents

If you are selected for an audit, the IRS will request documentation to verify the claims on your tax return. Gather all relevant financial records, such as:

  • W-2s and 1099s
  • Bank statements
  • Receipts for deductions
  • Business expense records
  • Property tax and mortgage interest statements
  • Loan documents and investment records

Step 2: Understand the Type of Audit

As mentioned earlier, an audit can be conducted via mail, at an IRS office, or in the field. Knowing the type of audit helps you prepare adequately.

Step 3: Limit Your Responses to What Is Asked

Provide only the information requested by the IRS. Offering extra details could lead to additional scrutiny.

Step 4: Request an Extension If Needed

If you need more time to gather documents, you can request an extension from the IRS.

Step 5: Seek Professional Representation

Hiring a CPA, such as Roger Ely CPA, ensures you have expert guidance during the audit process. A professional can communicate with the IRS on your behalf and help resolve any issues.

Common Reasons for IRS Audits

While some audits occur randomly, others are triggered by specific factors, including:

  • High Deductions Compared to Income – Large deductions relative to your income can raise red flags.
  • Unreported Income – Failing to report all income sources can lead to an audit.
  • Excessive Business Expenses – Business owners must ensure all expenses are legitimate and well-documented.
  • Rental Property Deductions – Property owners must maintain accurate records for rental income and expenses.
  • Round Number Estimates – Using exact round numbers instead of precise figures can make the IRS suspicious.
  • Frequent Loss Claims – Reporting business losses multiple years in a row may attract IRS scrutiny.

How to Reduce the Risk of an IRS Audit

While audits aren’t always avoidable, you can take steps to minimize your chances:

  • Keep thorough financial records.
  • Report all income accurately.
  • Be honest with deductions and business expenses.
  • File your taxes on time.
  • Work with a CPA to ensure compliance.
  • Avoid excessive charitable donations that don’t align with your income level.

What Happens During and After an IRS Audit?

During the Audit

  • The IRS will review your documentation and may ask follow-up questions.
  • You may need to meet with an IRS agent or send additional records by mail.
  • The process can take weeks to months, depending on the complexity of your case.

After the IRS Audit

After the IRS completes an audit, there are three possible outcomes:

  1. No Change – The IRS finds everything accurate, and no further action is needed.
  2. Changes with Agreement – The IRS proposes changes, and you agree to pay additional taxes.
  3. Changes with Disagreement – You have the right to dispute the audit findings through an appeal.

If you disagree with the audit results, you can:

  • Request a conference with an IRS manager.
  • File an appeal with the IRS Office of Appeals.
  • Take your case to Tax Court if necessary.

How Roger Ely CPA Can Help You Handle an IRS Audit Effectively

Dealing with an IRS audit or notice can be overwhelming, but you don’t have to face it alone. Roger Ely CPA is here to help residents and business owners in Edmond, OK, navigate tax challenges with confidence. Our firm offers:

  • Audit Representation – We communicate with the IRS on your behalf and ensure the best possible outcome.
  • Tax Return Review – We help identify errors or discrepancies before the IRS does.
  • Strategic Tax Planning – Proactive tax planning can help reduce the likelihood of an audit.
  • Compliance Support – We ensure your tax filings meet federal and state regulations.
  • Appeal Assistance – If you disagree with the audit results, we can help you file an appeal and fight for a fair resolution.

With years of experience handling IRS audits, we provide expert guidance and peace of mind.

Contact Roger Ely CPA Today

If you’ve received an IRS notice or are facing an audit, don’t wait—contact Roger Ely CPA, the most trusted CPA in Oklahoma.

📞 Phone: 405-684-0486
🌐 Website: www.oklahomacity-accountant.com

Let us help you handle your tax matters effectively and ensure your financial peace of mind.