In our last post, we took a look at five of the most common sources that could spark an IRS examination or audit of your 501(c)(3) organization (or other nonprofit). In this article, we’re going to equip you with five rules you need to know should you get the dreaded notification that your organization is going to be examined.
If you haven’t read the prior article, go here to read it first.
Rule #1: Don’t panic. Breathe. Yours is not the first nonprofit to ever be audited. You can survive this. I’m not going to lie and say it will be a pleasant experience, because it won’t be. But, fear causes you to react out of emotion, not logic. Slowing down and calming your nerves will put you in a much better frame of mind to tackle the next few steps.
Rule #2: Don’t go it alone. If you could survey every person, business and nonprofit that has ever gone through an audit, I suspect you would find near unanimity about this one. You need professional representation. You simply do not have the depth of knowledge or understanding necessary to do this on your own. It is very much like being your own lawyer at a trial…and you know what they say about that: “Fool for a client…” Hopefully the professional who helped you prepare your IRS filings is competent to represent you. Such representation, should it be necessary, is always a part of our preparation services. A professional understands both the law involved and usually has experience dealing directly with the IRS. Let them handle it.