What are the different types of audits?

The IRS uses three types of audits to examine tax returns:

Correspondence Audit. By the far the most common. It’s the IRS asking for documentation relating to specific items on your return, and you communicate by mail.

Office Audit. The IRS invites you to their office to review your return. You will meet with a revenue officer (also known as a tax auditor).

Field Audit. The IRS wants to come to your home or business and review documents and look around.

However, no matter what the type of audit, keep in mind that an audit’s stated purpose is to examine your tax return for accuracy. And a tax return, no matter how complicated, has two basic disclosures:

  1. Amount of income. Example: gross income.
  2. Reduction to income. Example: mortgage interest.

With an audit, the IRS focuses more on “A” than “B.” Even though the stated purpose of an audit is to verify that your tax return is correct, the reality is that an audit is an IRS collection tool. That’s where you may need to put your foot down with the IRS Agent, and control the audit.

Therefore, it’s vitally important to know your taxpayer rights if you are subject to an audit. Our clients are astonished – and pleasantly surprised – to discover how they may be protected in an IRS audit, and how the scope of an audit can be limited by applying those protections.

Call us for a free tax audit defense analysis. You may also discover peace of mind through our free book, How to Get Tax Forgiveness.