Rule number one: Never go to an audit in person! That's why you pay a professional tax preparer (CPA, Lawyer, &c) and they sign off on your return.
Rule number two: Give your tax preparer power of attorney to discuss ONLY the return for the year in question. This measure prevents fishing expeditions like "2010 seems to be OK so lets look at 2009". At this point your preparer packs up his notes and says "I am not authorized to talk about anything except the 2010 return. We will have to schedule another appointment after I consult with my client." He then picks up his briefcase and leaves.
Rule number three: Rinse and repeat as needed until you have had three consecutive audits with no factual error judgments against you. If they persist, you file a harassment suit against the examiner, his supervisor, and the manager of the local office.
That's how to play their game, break up their attack into bite sized pieces, remain outside the arena, stall, reschedule, drag things out, use their tactics against them (legal jujitsu), go on the offensive.
I've been audited three times and they have never squeezed a dime out of all the wogga wogga we went through. I'd rather pay my preparer for his time than play their game and loose because I don't know the rules.
If you don't use a preparer to "do" your 1040, you really should. Especially if there is any chance of an audit, you sit home and tend your knitting while your guy does battle for you.
Regards,
GtG
Outstanding recommendations Gandalf.
I gave up preparing my own years ago. I now use an Enrolled Examiner tax preparer. In many ways I think they know more than attorneys but aren’t as ruthlessly capable.
Great advice, Gandalf. I’m definitely saving this for future reference. Scrod the IRS. We’re all “suspects” here.