A Brief Guide to the Different Types of IRS Audits

Getting an audit notice from the IRS is every taxpayer’s worst nightmare. It makes sense that such a notice would cause some anxiety and concern. Remember that an audit notice can happen for a number of reasons. From random selection to actual cause, getting a notice doesn’t necessarily mean that something is wrong. There are three main types of audits with varying degrees of involvement. So, if you’ve received a notice of an audit from the IRS, the first step is determining which type of audit you’re facing. Keep reading for our brief overview of the different types of IRS audits.

The Correspondence Audit

First up is the correspondence audit, which is the least extensive type of audit performed by the IRS. As its name suggests, the correspondence audit is performed entirely via correspondence (i.e. letters in the mail from the IRS). Correspondence audits are resolved relatively quickly. They are generally limited in scope, so the audit ends once the taxpayer provides the requested documents or substantiation that the IRS has requested. However, if the IRS finds a reason why it cannot resolve the issue this way, it reserves the right to escalate it to an office or field audit.

The Office Audit

Unlike in a correspondence audit, an office audit involves an IRS representative interviewing you in person to inspect your records. Prior to the interview, the IRS will mail you with a letter that explains the type of audit and what documents you will need to bring with you. You can expect the auditor to double check what you reported on your tax return in order to make sure that everything is both correct based on supporting documentation as well as in compliance with tax laws.

It’s also important to note that you might have been selected for an audit at random as part of the IRS’ routine compliance efforts or because your return was flagged due to suspected errors based on mismatching information.

The Field Audit

Finally, there is the field audit, which is the most comprehensive of all audits. Field audits occur at the taxpayer’s home, place of business, or at their accountant or lawyer’s office. They are very intrusive and can require multiple meetings and last for several weeks if not months.  If you have a field audit scheduled for your business, you should let your employees know that they can be interviewed about various processes and issues related to the business.

Honorable Mention – The Adjustment Letter

Although not technically an audit, an adjustment letter deserves a mention here because it involves the IRS getting involved in a change or issue to a taxpayer’s tax return. Usually, an adjustment letter is of no real concern, as it usually just informs the taxpayer of some type of adjustment the IRS made in connection with your tax return. A common situation where adjustment letters come into play is if you owe additional taxes because of a slight error made when filing your return.

A quick note: The IRS does not call people on the phone. All audits start via correspondence in the mail. Many people receive hostile scam phone calls by fraudsters pretending to be the IRS, which could end up costing you more than any audit could.

Contact Weisberg Kainen Mark, PL today.

If you have received any notice of an audit from the IRS, it’s essential that you speak with an experienced tax professional right away to make sure you get it taken care of right. At Weisberg Kainen Mark, PL, we regularly help our clients with IRS issues and can help you navigate the complexities in the process. Contact us today to learn more about how we can help.

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Weisberg Kainen Mark, PL

As experienced trial lawyers with a passion for justice, our firm provides clients with compelling advocacy, attorney availability, and creative solutions to your tax or criminal law matters.

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