What to do when the IRS audits you

From OFA: ANLA and OFA have received reports suggesting that the Internal Revenue Service (IRS) might be stepping up audit activity of employers in our industry. As is the case with other types of government audits like wage & hour and I-9 audits, there are general good practices to follow. Each case also has unique facts and circumstances, so it is important to seek and follow good professional advice.

Tax compliance in our industry can be particularly tricky. There are special rules applying to agricultural enterprises, such as when and how inventory is valued. Businesses that are growing both nursery and greenhouse crops as well as buying plants from others may face special challenges.

The following are general background and good practices with respect to IRS audits:

-If you are audited, please contact ANLA or OFA immediately to report this.

-The IRS does not contact an individual via e-mail for an initial appointment. Contact related to being selected for an audit will be made via telephone or mail only, due to disclosure requirements.

-If the IRS calls, what do you do? It is best to strike a cooperative tone. There is little to be gained by confrontation. The IRS has extensive enforcement authority; if it wants to see specific records, more often than not, it will eventually secure the authority to do so.

-Do not turn over anything to the IRS without first talking to your tax advisor.

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