This post is part of our series on the different types of IRS audits.
IRS Office audits are used for issues that are too complex are large for a correspondence audit, but too small for a field audit. They usually involve issues with Schedule A (itemized deductions), Schedule C (business profit/loss), or Schedule E (rental income/expenses). The audit is usually triggered by a single issue on these schedules, but can quickly expand to other areas if auditor suspects there might be more problems on the return.
Office audits happen at the IRS office and include audit interview with an IRS auditor. The auditor will request information relating to the specific issue under examination, as well as more general information like the financial position, employment, and lifestyle of the taxpayer. This is used to look for other potential problems on the tax return, like underreported income or improper deductions. By answering the auditor’s questions and/or providing additional documentation, the taxpayer could unintentionally give cause for the auditor to expand the scope of the audit or open up additional tax years for examination.
Office auditors are well-trained on the specifics of the tax law, as well as how to get nervous taxpayers to give up damaging information. Taxpayers are strongly advised to level the playing field and protect themselves against aggressive auditors by hiring a tax attorney to represent them in the audit.