Independent Contractor Compliance Blog - by Collabrus™

Here’s a common scenario: You get a letter from the IRS or from a state tax audit agency. It starts out with something like:

“Dear Mr. Jones, Your company has been selected for an employment tax audit…”

Sometimes, you just receive a phone call, seemingly without warning. Maybe a letter was sent and it was misrouted to HR or is lost somewhere in Accounting. If there isn’t a response to the initial letter within a reasonable amount of time, many auditors will simply pick up the phone and call you.

Warning: Legitimate tax auditors do not send you an email notice you are being selected for an audit! If you receive an email asking for information, without any previous verified contacts that you are selected for an audit (via US Mail or telephone call), it is a scam. Contact the authorities.

Make sure you are really talking to a government tax auditor

If you get a phone call from someone who is claiming to be a government employee and asking about your confidential information you should always verify this person’s identity first. Many people are so rattled by a call from a government tax agency they allow normal safeguards to fall by the wayside. Determined scam artists know this and can use it to steal sensitive information about you, your employees, and your company.

If you get this call, before giving any information, get the individual’s:

• Name
• Civil service title
• Phone number
• Office address
• Email address
• Purpose of the call

Tell the auditor you need to contact your accountant or CFO, or anything, and you will get back to him/her within an agreed time frame. Do not set an appointment or provide any information during that initial phone call.

Don’t stall after the call.

As soon as you hang up, independently obtain the phone number (get the number from a different source-not the number the “auditor” provided) of the government tax audit office the “auditor” claimed to be assigned to. Call the office and ask to speak to the supervisor or administrator in charge. (This will be the most frustrating part. You will probably need to endure, “Push 1 for…” and be placed in the “Queue”). Once you get through to a real person verify that the individual who called is legitimate.

Don’t worry, this will not make the auditor angry and will not provoke them to “get even with you…”  To the contrary, it will likely create an aura of respect for you.

If the call was legitimate, call the auditor back as promised. If not, call the authorities.

By the way, you just bought yourself time to prepare for the conversation with the auditor, or to contact your tax professional for assistance.

What’s next?

Some things to ask before the auditor shows up the first day.