The Three Types of IRS Audits

May 24, 2016
Robert V. Boeshaar

Receiving a notice that your tax returns are going to be audited by the IRS can be a daunting and confusing experience. What are you supposed to do?  How are you supposed to respond? How can you expect the process to play out?

Audits should always be taken very seriously, but as long as you properly prepare yourself and set your expectations, they should not be a cause for panic.

The scariest aspect of an IRS audit for most people is the fact that they just do not know what is going to happen next.  They simply fear what they do not understand, and the easiest way to combat that fear is to educate oneself.

There are in fact three main types of IRS audits that you could be faced with.  We have provided some important details about each below:

Correspondence Audit

If you have received a phone call or a letter from the IRS stating that you are being audited, chances are good that it will be a correspondence audit.  These are the most common types of audit, and they are the least intensive as well.  If you are facing a correspondence audit, there will be no need for you to go anywhere or meet with anyone from the IRS as the entire audit will be conducted by mail.  This is not always the most efficient method, but it also tends to be less strenuous.  Generally speaking, a correspondence audit may be conducted in order to obtain extra verification or confirmation from you regarding certain aspects of your tax returns.  The IRS may also be seeking corrections to your return based on information they obtained from a third party.  If this is the case, they will point out the specific discrepancy and detail what is needed. You will simply have to provide them with the correction or extra verification by mail.  Keep in mind, it is still important to have a skilled tax attorney assist you with this type of audit, particularly if you do not have the verification that the IRS has requested.  If mistakes are made, it could quickly escalate your situation.

Office Audit

Office audits involve the IRS requesting that you physically visit an IRS field office to take part in an in-person interview with an auditor.  Obviously, this is a bit more intensive than a correspondence audit.  The IRS will tell you what you need to bring, and more than likely they will be seeking to discuss very specific aspects of your tax returns in order to authenticate their validity.  Speaking directly with an auditor can be tricky, and it is easy to give away far more information than the auditor actually needs, which could lead to further investigation into your taxes and finances.  You should always bring a tax attorney with you to an office audit in order to protect your interests.  Usually you can expect an office audit to be completed with a one day meeting so long as the IRS does not uncover any new issues.

Field Audit

Though field audits are very uncommon, if you receive notification that the IRS is going to conduct a field audit then you should be aware that the circumstances are likely very serious. Whereas an office audit usually involves an auditor examining specific aspects of your returns, a field audit involves an auditor coming to you—either to your home, business, accountant’s office, or somewhere else of relevance—and conducting a comprehensive investigation into your taxes. Oftentimes, though not always, this means the IRS suspects serious or even criminal issues with your taxes and is seeking to uncover more evidence. Under no circumstances should you ever face a field audit without the guidance and advice of a skilled tax attorney.

If you receive notification from the IRS that your tax returns are being audited, whether by correspondence audit, office audit, or field audit, you should contact the law office of Robert V. Boeshaar right away.  More often than not, tax audits are relatively simple matters so long as they are properly and effectively addressed. Give us a call today and let us help.

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