You’ve received a letter from the IRS regarding an audit. What is your plan? Assuming the fetal position? Heavy drinking? Fleeing the country? Spontaneous combustion? None of these actions is necessary. Simply stay calm and assess the situation objectively.
“Anybody of any income level can potentially get audited,” says Betterment Head of Tax Eric Bronnenkant. He advises, “…that people prepare their taxes honestly and truthfully, and also be able to support what they put on their return in the event they get audited.”
The letter you receive may be one of three types:
- Adjustment Letter – This notifies you of a change in your taxes owed, or the refund amount. In this case, it is generally from an obvious wrong number entry or miscalculation on your form. The Tax Cuts and Jobs Act of 2017 brought about many changes, so it is to be expected that more taxpayers will make these types of errors until they are familiar with the new tax …