Fortune_Hunter - 2:53 pm on Oct 20, 2009 (gmt 0)

Don't volunteer anything! Keep your responses short and to the point.

I completely agree. I have thankfully never had to do one of these, but my accountant has done several. He explained that you want to let the IRS agent lead the interview. Don't bring all of your papers, don't volunteer anything. Simply answer the questions they ask truthfully and concisely. Don't ramble on or offer up additional details. If they want more details they will ask.

Here is a mistake I have heard friends of mine make. Don't take all of your records for one year or several years and let the agent start a free hunting expedition. You need to remain in control of everything the entire time. If you offer up additional records or details you can bet they will take you up on the offer and dig and dig and may find things they weren't even looking for.

Most important... do not lie.

Also excellent advice. Remember if you get caught in a lie you could quickly cause the audit to escalate and may even cause it to switch into the criminal realm instead of the simple fine, penalty and pay extra tax realm.