If you have been notified by the IRS that your tax return is going to be audited, it is important to review your tax return prior to the first meeting with the auditor. This is an opportunity for the taxpayer to establish questions and answers to issues that may be present within the return. It also gives the taxpayer a chance to change anything related to the return before the audit takes place.
Filing an Amended Tax Return
In the event there are any error related problems with a taxpayers tax return, it is possible for the taxpayer to file an amended return prior to the first meeting with the auditor to correct these errors. The benefit of filing an amended return prior to the first meeting with the auditor is the ability to avoid being subject to a 20% taxpayer accuracy related penalty.
Remember though, to qualify for not having the auditor give you a accuracy related penalty, the amended return must be filed prior to the first meeting that takes place with the person that is going to audit your tax return.