Will my tax preparer know if I get audited as a freelancer?

Imagine you've just completed your taxes for the year, and you're feeling a sense of relief. But then, you receive a notice from the IRS informing you that your return is being audited. Panic sets in, and you wonder if your tax preparer will know about this audit. In this blog post, we'll explore the relationship between tax preparers and audits, and what you can expect if you find yourself in this situation.

Understanding the audit process and how it involves your tax preparer is crucial for any freelancer. This knowledge will help you navigate the situation with confidence and ensure that you're well-prepared for any potential audits in the future.

By the end of this post, you'll have a clear understanding of whether your tax preparer will know if you get audited, what their role is during the audit, and how to handle the situation effectively.

What is an audit, and how does it involve my tax preparer?

An audit, or "examination," is a process where the IRS reviews a taxpayer's return to ensure that all the information reported is accurate and complies with tax laws. If the IRS decides to audit your return, they will send you a written notification either to your last known address or to your tax preparer.

Your tax preparer may be involved in the audit process if they prepared your return, and you authorized them to represent you before the IRS. In this case, they will receive a copy of the audit notice and may assist you in gathering the necessary documentation and responding to the IRS's inquiries.

What should I do if I receive an audit notice?

If you receive an audit notice, it's essential to remain calm and take the following steps:

  1. Read the notice carefully: Understand the reason for the audit and the specific items the IRS wants to review. Make sure to note any deadlines for providing the requested information.
  2. Contact your tax preparer: If your tax preparer is not already aware of the audit, inform them immediately. They can help you understand the notice and guide you through the process.
  3. Gather your records: Collect all the necessary documents and information related to the items being audited. Your tax preparer can help you determine what you need to provide.
  4. Respond to the IRS: With the help of your tax preparer, respond to the IRS's inquiries in a timely and accurate manner. Provide all the requested information and be prepared to answer any additional questions.

How can I reduce the chances of being audited in the future?

While there's no foolproof way to avoid an audit, you can take some steps to minimize the risk:

  1. Choose a reputable tax preparer: Work with a qualified and experienced tax professional who is familiar with the tax laws and regulations applicable to freelancers.
  2. Keep accurate records: Maintain organized and detailed records of your income, expenses, and deductions throughout the year. This will make it easier to prepare an accurate return and respond to any audit inquiries.
  3. File your return on time: Late filing can increase the chances of an audit, so make sure to submit your return by the deadline.
  4. Review your return carefully: Before submitting your return, double-check all the information for accuracy and completeness. If you're unsure about anything, consult with your tax preparer.

Take control of your audit situation with confidence

In conclusion, your tax preparer will likely know if you get audited, especially if they are authorized to represent you before the IRS. By understanding the audit process and working closely with your tax preparer, you can navigate the situation with confidence and minimize any potential issues.

Key takeaways to remember:

  • Your tax preparer will likely know if you get audited, as they may receive a copy of the audit notice.
  • Work closely with your tax preparer during the audit process to ensure a smooth and successful outcome.
  • Take steps to minimize the risk of future audits by choosing a reputable tax preparer, keeping accurate records, filing on time, and reviewing your return carefully.

With this knowledge in hand, you can face any audit situation with confidence and ensure that you're well-prepared for the future.

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