J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

48.4 Preparing for the Audit

After an office audit is scheduled, the first thing to do is look over your return. Refresh your memory. Examine the items the IRS questioned in its notice of audit, and organize your records accordingly. Also check the rest of your return and gather proof for items you are unsure of. At this point, you should take a broad view of your return to anticipate problems you may encounter. Before the actual examination begins, consider possible settlement terms. Assume that the agent will assess additional tax, but establish the range you will consider reasonable. You can always change your mind, but giving some thought beforehand to possible settlement terms will help you later when settlements are actually discussed.

You may authorize an attorney, CPA, enrolled agent, or other individual recognized to practice before the IRS to represent you at the examination without your being there. To do so, give your representative authorization on Form 2848. An attorney or other representative authorized on Form 2848 can perform any acts that you could, including entering into a binding settlement agreement.

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Planning Reminder

Audit Scheduling

Make sure that the examination is scheduled far enough in advance for you to get ready. Do not let the IRS hurry you into an examination until you are prepared. In some localities, particularly rural areas, ...