Tax Audits

What is a tax audit? You’ve likely heard the term thrown around as a cautionary tale. A tax audit, also known as an IRS audit, is an in-depth evaluation of an individual’s or business’s income tax return to verify that the information provided is correct. There are several types of IRS tax audits:


Mail Audits

This type of audit is conducted by mail. The IRS will send you a request for further information that you will need to send to them. Often, this type of audit is used to provide proof of certain deductions you took.


Office Audits

For this type of audit, you will need to attend a meeting at an IRS office. An audit officer will interview you about certain aspects of your return and may request that you bring certain documentation regarding your expenses.


Field Audits

In the case of a field audit, an IRS audit officer will visit your home or business. These types of audits are generally reserved for when a thorough evaluation is required.

Once an audit is complete, the officer will make their determination as to whether changes to your tax return are required. However, you may have the option to appeal their assessment. Fortunately, Community Tax provides audit defense and can help you with this process.

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Explore our top articles for answers to the most common tax questions.

Individuals or businesses who have made mistakes or questionable claims on their federal tax return may be audited. Generally, the IRS audits taxpayers that they believe owe more taxes than they paid and that they have a fairly good chance of actually retrieving that money.

A few reasons the IRS may audit you or your business include:

  • There are errors on your tax return.
  • You’ve failed to report a portion of your income.
  • You’ve reported false donations or other deductions.
  • You’ve claimed the same dependent as someone else.

Typically, the IRS decides to perform an audit when something is incorrect or seems suspicious on your taxes.

In most cases, the audit will send you a letter notifying you that you’re being audited. If you receive an email or phone call claiming the IRS is auditing you, be wary: it may be a scam.

If you’re audited, the IRS will either complete their investigation and determine that no action needs to be taken or they will require certain changes to your tax return. In the case that they do require you to take action, you can either allow them to make the changes to your taxes or you can challenge their assessment.

If you’re audited and you want to challenge the findings with the IRS Office of Appeals, you must request an appeal within 30 days. After this time, you must file with the U.S. Tax Court. To start an appeal, you need to submit Form 12203. If you are going to appeal the assessment, you should work with a tax professional because they can help you ensure that everything is done correctly and give you a fighting chance at negotiating with the IRS.