Being audited by the Internal Revenue Service is a fear most Americans share. The legends about audits are akin to a frightening ghost story told by the camp fire. It gets you worked up, stressed out, and terrified out of your skin. But in truth, going through an audit by the Internal Revenue Service isn’t that wicked. At least it wasn’t for me.
When I purchased my business in 2001 at the age of 19, the previous owners did not clue me in to how state and federal taxes were collected. I was young, motivated and sophisticated, and yet, still very clueless. After a couple of years in business, I was visited one day by an official who worked for the State. He asked me where my tax identification number and certificate were located. I did not have one. However, I soon got one and cleared up the lawlessness. I ended up paying over $12,000.00 in taxes and penalties. It was a hard but very valuable lesson. But at least I was caught up to date, and the horror was over. Or so I thought.
Shortly thereafter I received a letter in the mail from my local IRS office. It stated that I was being audited for my 2005 business taxes. I was alarmed. I heard all the stories and I feared they would find something and put me away in jail for decades. I knew I had nothing to hide, as I was always on the up and up. And yet still, I was apprehensive that I was going to be imprisoned. The years and years of horror stories that went along with audits and the IRS were now hovering in my brain.
The first meeting I had with the IRS agent was a formal. They informed me how the process functioned, what they were looking for and what items I should prepare and bring to the audit. The IRS gave me plenty of time, between four and six weeks, to gather what I needed and return for the audit. At no point did I feel rushed, and I was even able to postpone one meeting due to unforeseen circumstances. The IRS was polite and understanding, and accommodated me at another date. There was no known deadline and at no point did I feel like I was being pressured into one.
The audit itself was harmless. In fact, it was a borderline pleasant experience. Maybe I was the lucky one, but the IRS representative reviewing my case was very friendly and cordial. While he was examining a year worth of earnings, he made interesting small talk about sports and current events. At no point did he make me feel uneasy. Sure, there were definitely some questions that needed to be answered. Maybe a missing receipt, or a few nightly revenue totals were abnormal, but there was never any clear indication that I was doing anything unsatisfactory. I just answered all the questions honestly and as I knew them to be. It seemed that as long as I was honest and upfront, I really had nothing to fear but fear itself. And because I wasn’t hiding anything from the IRS, my audit went smoothly and I had no issues ever since.
Don’t get me wrong. An audit by the IRS is not a gratifying experience. I can think of a hundred things I would rather do. However, outside a few hours in meetings or compiling some paperwork, it was not a big deal. Stressful? Sure, it can be. Time consuming? Absolutely. But is it the nightmare that American folklore has made it out to be? Based on my experience, not even close.