The most damaging thing you can say in an audit is more than you were asked. Auditors ask specific questions. Answer those questions directly and stop. Every extra word you offer gives them new threads to pull. Volunteering information about other years, other transactions, or other aspects of your business that weren’t asked about can expand the scope of what they’re examining.

Never guess. If you don’t know the answer, say so. “I don’t have that information in front of me” is a perfectly valid response. Guessing wrong creates real problems because either you’ve made a false statement or you’ve contradicted your own records. Both outcomes hurt you. Ask for time to locate documentation rather than speculating from memory.

Don’t lie. This seems obvious but the temptation increases when you’re nervous and want the problem to go away. Making false statements to a federal agent is a crime. Beyond the legal exposure, auditors are trained to catch inconsistencies. One lie often requires more lies to cover it, and the examiner has access to information you might not realize they have.

Avoid casual admissions that sound like confessions. Saying “I might have missed some of that” or “I wasn’t always careful about tracking those” feels like honesty but hands the auditor evidence of negligence. Let the records speak. If there are gaps or issues, address them factually without editorializing about your habits or attention to detail.

Don’t be hostile or confrontational. Auditors have discretion in how they conduct examinations and what penalties they recommend. Making their job harder doesn’t help your case. You don’t need to be friendly, but professional and cooperative is the right tone.

Never sign anything you don’t fully understand. Auditors may present documents for signature during or after the examination. You have the right to review anything before signing. If you’re unsure what a document means, don’t sign it in the meeting.

The simplest way to avoid saying something damaging is to not be in the room at all. An Enrolled Agent providing IRS representation can handle the examination without you present. They answer questions, provide documentation, and negotiate on your behalf. You don’t sit in a meeting trying to remember details from three years ago while an examiner watches your reactions.

If you do participate directly, keep responses short. Answer what was asked. Don’t explain, justify, or provide context unless specifically requested. The auditor isn’t there to understand your business. They’re there to verify compliance. Give them the information they need and nothing more.

Most business owners who get in trouble during audits aren’t intentionally dishonest. They’re nervous and trying to be helpful. A Phoenix area business accountant who handles audit representation can coach you on what to expect or simply handle the entire process so you don’t have to navigate these conversations yourself.