How to Deal with an IRS Examiner

The IRS has the statutory right to examine your records. You are required by law to respond fully and accurately to IRS inquiries.  However, there are certain practices and approaches that can improve your chances of minimal cost.

  1. Remember that the agent's job is to generate revenue for the government.  Some agents are very personable.  Do not chat idly with the agent.  Maintain a cordial, yet distant relationship.
  2. The ideal workspace for the agent would be clean, isolated from the daily activity of your office, and civilized, but not too comfortable.
  3. Do not allow the agent to freely roam through your files.  You may be surprised how often they can trip over sensitive issues.  You should ask the agent to clear all documentation requests through designated personnel.
  4. If the agent asks you any questions about which you are the least bit concerned, you should tell the agent that you will have to get back to them.  You should then call us to review your concerns prior to answering.  However, try not to appear that you are hiding anything.
  5. Do not concede any issues.  It is possible that even issues that are "dead in the water" can be traded for less clear issues.
  6.  It may be necessary to appeal the agent's findings.  An agent will usually need to prepare a much more detailed report if the audit remains unagreed and goes to appeal.  They usually prefer to settle cases without expending this additional work.  This is another reason not to concede issues.