This is what people need to understand about an Audit: the biggest mistake you can ever make is attending your own audit. “He who defends himself has a fool for a client.”
You should never, ever go to your own audit.
Attending your own audit is akin to being a murder suspect and voluntarily going down to the police station and saying " Here I am ask me anything you want to."
The reason you don't go to an audit is simple. If you are not there, they can’t ask you any questions. Anything and everything that you might say, if you go to the audit, will be used against you if at all possible.
Auditors are trained to ask questions that will elicit all types of information. Auditors are sent to special IRS training classes to learn interrogation techniques. There is a motive behind everything that comes out of their mouth.
If you are not present at the audit, the auditor cannot ask you any embarrassing questions that you would rather they not know the answer to.
When and auditor asks a question, we know what their motive is. We know the direction they are heading in. If you are not well versed in the tax law you are going to get trampled on.
We know, for example, that there are questions that we do not have to answer. Many of their questions are not germane, and are totally irrelevant. We will only answer questions that the law requires us to answer.
Taxpayers often meet with IRS officials thinking that they have to answer every question about everything. They mistakenly think that the IRS is a supreme authority. No matter how intrusive or irrelevant the IRS questions are, taxpayers will usually answer them, to their own detriment. "Do-it-yourself" does not work in audits.
If the auditor asks any question that is not directly related to a deduction on your return, the auditor is not going to get an answer from us. Often they are looking for hidden income. The only thing the taxpayer is obligated to prove during an audit is the validity of their deductions. You are not required to prove that you did not receive phantom income.
If the auditor wants to probe for hidden income, there is no burden on the taxpayer to prove anything. The taxpayer is not required to prove that he did not receive mystery income. With regard to “un-reported income” the burden is on the IRS to prove that the taxpayer had more income than they reported on their tax return.
Few taxpayers realize they have the right to remain silent. You are not required to be present at the audit. You have the right to have a representative. No good will come of a taxpayer going to the IRS and sitting down in front of an auditor. That is the classic case of the sheep going into the den of lions. Often taxpayers will volunteer information that the auditor didn't even ask for. The taxpayer thinks he is being cooperative and ends up spilling the beans on something the auditor wasn't even thinking about. That is why the taxpayer should never go to an audit. Never . . . . never . . . . never.