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Preparation key to surviving an IRS audit


Most taxpayers never face an IRS audit. But those who do need not panic, says Richard Davis, assistant professor of accounting at Susquehanna University in Selinsgrove, Pa.

The trick to surviving an audit is being prepared mentally and physically. First, collect and organize all relevant documents for HTC the tax years in question.

"One of the worst mistakes you can make is to show up for an audit carrying a shoe box filled with 20 years' worth of receipts that aren't organized," says Mr. Davis, who worked for the Internal Revenue Service for 15 years. "The IRS agent won't even look at them."

Next comes the mental part. Many taxpayers may be nervous or defensive when they enter an audit. As much as possible, stay calm and objective.

"Don't be negative or rude to the person doing the audit," Mr. Davis says. "It's like trying to argue with a state trooper when they're writing you a ticket. All you are going to do is put them on the defensive, and, in the end, you still get the ticket."

Questions should be answered truthfully, and your records should support the information on your tax returns.

It's not easy to outsmart a con artist. But if you have a success story to tell, a Michigan researcher wants to hear from you. The information will be used to identify methods of dealing with suspected swindlers.

To participate, send details of your account to Professor Monroe Friedman, Avoiding Confidence Swindles Project, Eastern Michigan University, Ypsilanti, Mich. 48197.

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