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How Do I Prepare for a Tax Audit?

The mere mention of the words tax audit can instill fear in the bravest of people. When the Internal Revenue Service informs an individual that he or she will be audited for one reason or another, it is no laughing matter. However, just because a tax audit is impending, it does not mean the end of the world. Indeed, there are certain things that you can do to prepare for a tax audit and come away unscathed because of it.

There are several kinds of tax audits that the IRS carries out. In general, we can classify these tax audits as being a paper tax audit and a face to face tax audit. The former kind is a simple tax audit that will not require you to meet with an IRS agent. Instead, you merely have to gather the documents required of you and send them to your local IRS office. The preparation - gathering of the documents and sending them in - is practically the audit itself. This is one big reason you ought to keep your receipts and other forms as records.

The second kind of tax audit - face to face - may require more preparation. In fact, if you are unsure as to how to go about it, it is best for you to take on the services of a tax professional. In this manner, you will be guided in the best possible way.

In general, the best thing that you can do to prepare for a face to face tax audit is to organize your financial records. You have to make sure that all the documentation is on hand when you meet with the IRS agent. All the documents pertaining to the tax returns being questioned should be with you. Even if there is only one area being questioned, it is better to be transparent and show everything that you have - show that you have nothing to hide.

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