We’ve been talking about IRS tax audits and your freelance writing business for the past few posts. While there isn’t much you can do to prevent an audit, once an audit starts there are some things you can do to be sure it goes your way.
Here are some of the most effective tips to follow when your freelance writing business gets audited:
Get Organized
From the moment you’re notified that you’re being audited, you need to start pulling your stuff together. Create a filing system that you understand (if you don’t already have one) and get every piece of paper where it needs to be. You want to be able to provide any requested item at a moment’s notice.
Provide Required Documentation
The IRS auditor is going to ask you for documentation to support specific deductions. Make sure to give them the documents to support it, but only the relevant documents. Don’t give them any more or less than what they’re asking for.
Answer Honestly and Succinctly
Just like you don’t want to give the auditor documents she hasn’t asked for, the same goes for answering questions. Answer his question directly. If he needs more information, he’ll ask for it.
Maintain Control of your Documents
If you have only one copy of a document, don’t hand it to the auditor. Don’t leave original documents with the IRS. It isn’t that the agent is likely to purposefully lose or damage them, but it can and does happen.
Accordingly, you should ask for a copy of any document the auditor shows you or asks you to sign. You don’t need to feel obligated to sign anything immediately, either. You can always ask for more time to review it.
Don’t Make Small Talk
The IRS agent isn’t your friend, a client or a colleague. Her job is to figure out if you’re a liar. That doesn’t mean you should be unprofessional, by any means. It just means you should avoid saying anything that isn’t a direct response to a question. Even a small comment can give them ammunition.
Be Calm
This is probably the hardest thing to do when you’re audited. Keep your cool. Don’t argue, and don’t be belligerent. If you disagree with the auditor’s findings, you can deal with that later.
Consider an Attorney
While most freelance writing business audits are probably pretty straightforward, some aren’t. If your business structure tends to be complex or if you have large or obscure deductions, consider hiring a tax attorney.
