There aren’t many events in a person’s life that are more stressful than a tax investigation. Tax rules are complicated, and when mistakes are made the government notices. The unwanted attention can create stress that infiltrates all aspects of your life. Many people turn to their tax attorney to helped them get through the stress. But there are other things you can do to maintain a clear and level head.
1. Give what the agent requests
When you undergo an audit, you might be tempted to give everything you can to find to the government. You might think that you are being helpful, but you are just creating more problems for yourself. Often, the IRS found a math error or noticed that you forgot to submit a form.
If you give them more than they ask for, you could be setting yourself up for more problems, especially if they find another error on the items you give them. Therefore, do what they request, nothing less and nothing more. Don’t ask questions or give suggestions, just provide the paperwork they want. The agent isn’t interested in being your friend, they just want to do their job and get on to the next task.
2. Don’t overthink the problem
Another common issue with tax investigation is overthinking. You get stuck in your head worrying about the outcome of the audit and how much money the mistake might cost you. This is never healthy, and only creates more stress in your life.
You can stay calm by keeping things in perspective. People and businesses are audited all the time, some are audited every year. Often, the problem is small, like a single error that sends a red flag to the IRS. You shouldn’t overwhelm yourself and your family with worry, as most audits are easily remedied.
3. Do not assume the IRS is correct
The IRS can make mistakes just as easily as you can. Often the mistakes are in interpreting the tax code and agents usually see it in the favor of the IRS. This is why having a tax attorney is so helpful, because they see the code from a plethora of angles. Your attorney can argue the law on your behalf.
For example, if you donate your car to a charity, the value of the car might be up for debate. No one will argue the charitable donation, but the agent might think the value of the car is less than what you thought. Your attorney can help prove your case.
4. Stay organized
Often, we add to our stress because we cannot find the receipts or paperwork we need to prove our cases. If you are not organized, you could run into more trouble as the audit continues or as the next tax season approaches. Use this time to find ways to stay organized so you get your next tax return correct. Look into apps that help you save receipts and software that helps you organize your income and expenses.