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What to Do When the IRS Investigates You

By Hampton & Pigott
Posted on 6-19-2023

You may never have thought it could happen to you, but it has, the IRS has decided to investigate you. When the IRS investigates you, it's important to handle the situation with care and adhere to certain guidelines. Here are some dos and don'ts to keep in mind.

Dos:

Cooperate and Respond Promptly

It's crucial to cooperate with the IRS during the investigation process. Respond promptly to any requests for information, documentation, or meetings. Timely and complete cooperation can help establish goodwill and demonstrate your willingness to resolve any potential issues.

Seek Professional Assistance

Consider seeking the guidance of a tax professional, such as a certified public accountant (CPA) or a tax attorney experienced in handling IRS matters. They can provide valuable advice, help you understand your rights and obligations, and represent you during the investigation.

Gather and Organize Your Records

Collect and organize all relevant financial and tax-related records that pertain to the investigation. This includes receipts, bank statements, invoices, tax returns, and any other supporting documentation. Having a well-organized record-keeping system can help you respond to IRS inquiries accurately and efficiently.

Review and Understand Your Rights

Familiarize yourself with your rights as a taxpayer during an IRS investigation. The IRS has specific guidelines and procedures in place to protect taxpayers. Understanding your rights can help you navigate the investigation process more effectively and ensure your rights are respected.

Don'ts:

Panic or Ignore the Situation

It's essential to remain calm and avoid panicking when faced with an IRS investigation. Ignoring the issue will not make it go away and can potentially worsen the situation. Proactively address the investigation by cooperating with the IRS and seeking professional assistance.

Volunteer Unnecessary Information

While it's important to provide complete and accurate information as requested, refrain from volunteering unnecessary details or sharing more information than required. Stick to answering the specific questions asked by the IRS and avoid providing additional information that could potentially complicate the investigation.

Destroy or Alter Records

Destroying or altering records relevant to the investigation is illegal and can lead to severe penalties. Preserve all records and avoid any actions that could be perceived as an attempt to obstruct the investigation. Cooperate fully and provide the IRS with the requested documentation.

Lie or Provide False Information

Providing false information to the IRS is a serious offense and can result in criminal charges. Always be truthful and provide accurate information during the investigation process. If you're uncertain about something, consult with a tax professional for guidance.

Represent Yourself Without Knowledge or Experience

IRS investigations can be complex, and the tax code is intricate. Representing yourself without sufficient knowledge or experience in tax matters can be challenging. It's generally advisable to seek the assistance of a qualified tax professional and attorney who can navigate the process on your behalf.

Remember, every situation is unique, and the guidance provided here is general in nature. It's crucial to consult with a tax professional who can provide advice based on your specific circumstances and the details of the IRS investigation. And if you really want to cover yourself, contact Hampton & Pigott. Our criminal law attorneys will be sure to advise you during the investigation process and support you if you are needed in court.