Getting audited doesn't mean you've done something wrong—even though the IRS would like you to think you have. Don't be intimidated! The IRS agent conducting your audit has no power to increase your taxes.

To reclaim the upper hand, remember your rights:

• Just say NO! You can say no to any decision the IRS makes. And when you do say no, you often get the IRS to offer you a better deal.
• You don't have to pay penalties if you simply made a mistake. Penalties are only due if you tried to beat the system. If the IRS says you did it on purpose, they have to prove it—and that's not easy to do.
• The IRS can't force you to sit down face to face. You have the right to conduct your audit through the mail.
• You have the right to challenge any IRS notice without retribution.
• You have the right to pay your debt in installments. If you agree you owe more taxes and don't have the money to pay, the IRS must work out a payment schedule with you. Don't borrow money to pay the IRS.

Straight Talk Tip: Our favorite book to help you fight the IRS, is 41 Ways to Lick the IRS With a Postage Stamp by Dan Pilla. It's available at www.taxhelponline.com.

When you get an audit notice, send copies of any supporting receipts or canceled checks to the IRS office that issued the audit notice. Include a letter that is short, fact-filled and to the point. Send everything certified mail, return receipt requested.

You may keep getting notices after you mail out your letter. Don't panic! It takes a while for your letter to filter through the IRS channels. Simple make a copy of your previous letter and send it to the IRS with a copy of the new notice. Most audits are resolved through the mail.

If the IRS says you owe a large amount of money, we recommend consulting an experienced accountant. You should also see an accountant if the IRS asks for a sit-down audit interview.

Before you go to the audit interview, carefully review your tax return. Make sure you understand how you or your accountant calculated the item in question. Also, make sure you have copies of documents you need to substantiate your claim. If you see any problems, contact your accountant.

Smart Money Move: You or your accountant should take the time to research the tax law for cases similar to yours. You'll not only know what IRS precedents have been set—you'll bowl the auditor over by your ability to legally back up your position.

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