This is the first post in our series on the different types of IRS audits.
In previous articles, we discussed What to expect during an IRS Audit and also learned the answer to the question Why was I Audited? This article will cover the different types of audits and provide a few strategy tips for winning your audit. If you have additional questions or would like to find out how we can help protect your rights when it comes to an IRS audit, contact us to talk to an IRS Audit Attorney in Reno, NV.
IRS Audit Types
IRS Correspondence Audit
The first type of audit is the correspondence audit. This type of audit is conducted by mail, which means you never actually meet or even speak with an auditor. In a correspondence audit, the IRS sends you a letter requesting more information on a certain item on your tax return, and then you mail that information in. For this reason, correspondence audits tend to be pretty narrow in scope and limited to just one or two items the IRS thinks were just a mistake. They usually come up when your tax return is missing income from a 1099 or W-2 that the IRS has received in your name. Occasionally, the IRS will use a correspondence audit for small deduction items like a charitable contribution or unreimbursed employee expenses.
The key to prevailing in a correspondence audit is to provide documents in a very thorough and easy to understand manner, since you will not have the opportunity to explain them in person. Although still stressful, an IRS correspondence audit is the easiest audit type to have. Read more about IRS Correspondence audits.
The second type of IRS audit is the office audit. Unlike a correspondence audit where everything is done by mail, office audits are done face to face with an auditor at your local IRS office. The auditor will question you directly about your tax return and the supporting documents you’ve provided. This can be stressful , so be careful not to slip up and give up information that can hurt you down the line.
The key to winning an office audit is to be cooperative without being helpful. Provide exactly what the auditor asked of you, but nothing more. While correspondence audits are very limited in scope, office audits can always expand to additional items and even additional years. So, it’s important to keep the auditor focused on a narrow set of issues and not give them any reason to dig further into your tax return. Read more about IRS Office Audits.
The third type of IRS audit is the field audit. Fields audits are typically only used for corporations and other business entities. In a field audit, the auditor actually comes out to your place of business to meet with you and inspect your financial records. This can be very disruptive, which is why it might be smart to hire an attorney if you’re going through a field audit. This way, your attorney can host the auditor at his or her office, and make your records available there as well.Read more about IRS Field Audits.
You might find the following articles helpful:
- What To Expect in an IRS Audit
- Top 10 IRS Audit Red Flags
- Winning IRS Audit Strategies