How to Handle a Tax Audit; the IRS Says I Owe $25,000

The Dreaded IRS Tax Audit Letter

The thick IRS letter arrived and I assumed it enclosed the tax forms I ordered. I was wrong. The letter contained a list of 5 sources of income that were not included on my 2010 tax return. Total bill due the IRS including penalties and interest, $25,000.00.

Panic set in.

Ironically, 2010 was the year I was exceptionally familiar with the tax law as I served as a VITA volunteer tax preparer for the IRS. What was going on?

I caught my breath and raced upstairs...