Was Audited Should I file

Today TaxMama hears from Donna from Los Angeles in the TaxQuips Forum, with a good question. “I was recently audited for my personal taxes for 2007 and 2008. I appeared with the auditor for the closing meeting and the final amount was discussed two months ago; but I have not heard from her since and have not received anything in the mail about the amount owed. I am ready to file my new return and am receiving a refund. I called the IRS to ask if I show an amount owed to them and the rep said “no.” Should I believe them? Will they keep my refund? I’d like to E-file as soon as possible but I’m not sure what to do.”

http://taxmama.wpengine.com/forum/taxquips/audit-completed-should-i-file-my-new-return/

Dear Diana,

 That’s a good question.

 Naturally, if you believe your auditor, your case is settled.

Sometimes, it takes a few months for the paperwork to get reviewed by supervisors and managers before the final report is filed.

 But you know that balance due is coming.  So, you have two choices:

 1) eFile now and perhaps get your refund, or run the risk that the audit will post during the few days your return is being processed.

2) Get an extension and wait for the audit report.

 Either way, you know that you owe IRS money.

So, it should not make much of a difference if they take part or all of your refund towards the balance due. At least that way you will either owe them nothing – or you will have a smaller balance to pay.

 Just one thing, when you file your 2009 return, don’t make any of the mistakes that generated the additional taxes for 2007 and 2008.  You’ll be fine!

And remember, you can find answers to all kinds of questions about audit results and other tax issues, free. Where? Where else? At www.TaxMama.com.

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