An IRS audit is the taxpayer's biggest fear. Even those who do their taxes honestly begin to wonder if they did it right. The idea of penalties, levies, and even prison come to mind. However, realize that you're protected by laws in an Internal Revenue Service audit before you panic.

In 1998, the IRS passed a third installment of the TaBOR, the Taxpayer Bill of Rights. After numerous grievances from Americans to Congress about the somewhat abusive behavior practiced by numerous IRS auditors, this bill was passed as a result of those efforts. The IRS is mandated to truthfully tell the taxpayer of the action performed against them and of their rights by this bill.

A formal meeting between IRS auditor and taxpayer is brought to mind in an audit. More often than not, though, audits are just done by post. The taxpayer often gets a letter from the IRS asking for additional documentation for specific claims in their tax returns. These are normally finished quickly if you maintained organized records.

They IRS may choose to assess the whole return or a part of it. However, if the IRS agent asks to look at just a small section of your tax return, make sure that you provide only that portion and nothing else. The IRS end up auditing a wider scope of the tax return when well-meaning taxpayers send more documentation than needed. They'll get inquisitive and request for more information. This is definitely not what you want.

Also, many people are clearly not tax lawyers or in any way fit to deal with handling an IRS examiner alone. In a meeting with the IRS, it is best to bring a qualified tax professional like a CPA or tax attorney. If you used a tax service or accountant, be sure you contact the actual professional who prepared your tax return. They can help in forming a reply to the auditor and may be aware of the particular issues pertaining to your return.

The IRS auditor tells you about your tax return's uncovered errors when the audit is resolved. You'll then be notified officially if you must pay more money in penalties, debts, or other financial adjustments. A few taxpayers have even gotten the rare refunds after an audit. This isn't likely to occur, though.