Audits & Examinations

An IRS audit is a review of your tax return and supporting financial information to verify that you reported income, deductions, and credits accurately. There are several types. A correspondence audit is conducted entirely by mail and is the most common and least invasive type. An office audit requires you to bring documentation to a local IRS office. A field audit involves an IRS agent visiting your home or business. The type of audit and its scope varies significantly depending on what triggered it and what the IRS is looking to verify.

An IRS audit is a review of your tax return and supporting financial information to verify that you reported income, deductions, and credits accurately. There are several types. A correspondence audit is conducted entirely by mail and is the most common and least invasive type. An office audit requires you to bring documentation to a local IRS office. A field audit involves an IRS agent visiting your home or business. The type of audit and its scope varies significantly depending on what triggered it and what the IRS is looking to verify.

The IRS selects returns for audit through an automated scoring system that flags statistical anomalies, through random selection, and through specific compliance programs targeting certain industries or income types. Factors that increase audit risk include high income, large deductions relative to income, self-employment income, home office deductions, and significant cash transactions. Receiving an audit notice does not mean you did anything wrong.

The most important thing to know about an audit is that how you respond matters as much as the underlying facts. Many people make the mistake of providing too much information, answering questions beyond what was asked, or agreeing to extend the audit period without understanding what that means.

An audit is a formal process with defined rules and specific rights. You have the right to representation and you do not have to meet with the IRS alone. When an Enrolled Agent handles an audit on your behalf, they attend meetings in your place, communicate directly with the auditor, and know exactly what documentation to provide and what not to.

The goal of audit representation is to resolve the audit for as little additional tax as possible, or to confirm that no additional tax is owed. Most audits, when handled correctly, end without significant additional liability. The outcome is often heavily influenced by how the process is managed from the first response.

Q: Do I have to meet with the IRS in person?

A: Not necessarily. Correspondence audits are handled entirely by mail. For office or field audits, you have the right to send a qualified representative in your place.

Q: What if I do not have all my receipts?

A: There are established methods for reconstructing records and providing alternative documentation. Lack of perfect records does not automatically mean additional tax owed.

Q: Can I appeal audit results?

A: Yes. If you disagree with the auditor's findings, you have the right to appeal to the IRS Office of Appeals and, if necessary, to Tax Court.

Q: How long does an audit take?

A: Correspondence audits can resolve in a few months. Office and field audits typically take six months to over a year depending on complexity.