Types of IRS Audits

Now that IRS Collections branch has come back from their long vacation, and are back to work, let’s look at Audits.? Audits may be the most feared word in the English Language.? It doesn’t need to be.?

The American Heritage Dictionary (online) defines an audit as “An examination of records or financial accounts to check their accuracy.”? When the IRS conducts an audit, that is what is being done.? Of course, that doesn’t change what, for many, is a terrifying initial reaction by most who get that dreaded envelope.?

The IRS does three types of audits.? They are the field, desk and correspondence.

The correspondence is the least intrusive. The IRS will send a letter asking for more information on two or three items.? Generally, that is all they need, but that doesn’t stop them from expanding the audit if they don’t like what they see.

The next most extensive audit is the desk audit.? In this case, the IRS will ask for a few items, but they want to see you in their office.? These have been greatly decreased in the era of COVID, but they do exist.

The most invasive audit is the field audit where the auditor wants to come to your business or home and do a detailed review of one or more tax years.? In this type of audit, the IRS has reason to believe that there are significant errors.

In any case, an audit is not the end of the world.? Barring criminal activity, these are unpleasant and manageable events.? Having experienced representation will facilitate the best possible outcome.

At BTM, we are ready and able to assist our clients achieve the best possible outcome.? Give us a call @ 678-717-9818.

Watch for my next blog on the first and most important steps to take when that letter arrives.

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#Audit #tax #taxrepresentation #taxresolution.