Being audited by the IRS is a real thing, and it can feel overwhelming is you are chosen for audit. If you are being audited by mail, then most of your communication with the IRS will be via, well, the mail. If you are being audited in person it's a whole different ball game and you need to be careful about what you say to the IRS auditor.
Remember that there is no such thing as "idle conversation" with an IRS agent. Anything you say to them is fair game in their case against you; each comment gives them more information. The agent is not your buddy, no matter how nice they are to you.
This is not the beginning of a long, fulfilling relationship.
Should I record my audit?
If you're audited by the IRS or are subject to a tax collection procedure, you're allowed to tape record the meeting (okay, 'tape record' for my generation, 'record audio' for the current generation). You do have to notify the IRS 10 days in advance of your meeting of your intention to record it.
The pros and cons
The most vital thing to realize when dealing with an auditor is that your relationship is very important. You need to understand that they are not your friend…but, you should treat them with respect. If you decide to record your audit know that you may be pegged as a 'troublemaker', even though you most likely just want to make sure you're doing everything correctly. You don't want the IRS saying "Watch out for him…why is he doing this? Take a real, hard look at this guy and all his records."
Another reason why we don't recommend recording your audit is that things can actually go in your favor with the IRS. An agent will do a risk assessment on your tax issue to decide if your case is worth their time and effort; it may just be in their best interest to negotiate with you. They could put an offer on the table — "If you're willing to do XXX, then we'll be willing to do YYY". They may not be as open to these sorts of options if you are recording the conversation.
So in what sorts of cases would recording the audit be beneficial? If you're truly concerned about the IRS twisting your words, or if your CPA is representing you (as this could potentially be a conflict of interest).
Can I choose where to meet the IRS auditor?
Yes. Per www.irs.gov:
"If we notify you that we will conduct your examination through a personal interview, or you request such an interview, you have the right to ask that the examination take place at a reasonable time and place that is convenient for both you and the IRS."
Don't be afraid to take the reins on this one. The IRS has been known to request that the interview take place at your home or place of work because "it's more convenient for you". In reality, they want you to be comfortable — the more comfortable you are, the more you're going to open up. The more information you give the IRS, the more ammo they have in their fight against you. A good agent will be your pal off the bat. As 'reasonable' as the auditor seems, remember, he's there to take your stuff.
Should I invoke my right to silence?
Technically, you don't have to speak to the IRS; if you don't want to co-operate you don't have to. BUT…the IRS will then conduct the audit on their own with no input from you, will send you the bill for the audit, and then enforce whatever conclusion they came to. If you choose to appeal the audit you will then have to get involved.
Your best option? Hire representation. We've had clients tell us that trying to deal with an IRS audit was the biggest, most stressful nightmare of their life, even when they had nothing to hide. A good goal to have: That you never speak directly with the IRS. If you hire representation, the IRS will pose a question to your attorney, you deal with your attorney, and the attorney deals with the IRS. It's by far the safest bet when dealing with the agency that poses the biggest threat to your life.
If you're looking into options for representation, contact us to schedule a free, confidential consultation. Call us at 888-727-8796 or email info@irsmedic.com.
