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Tax audits vary greatly in seriousness

On Behalf of | Oct 12, 2020 | Tax Law |

Opening the mailbox and seeing something from the Internal Revenue Service can make your heart stop. Many letters that the IRS sends are fairly troublesome news. These include things like adjustments to your taxes that lead to you owing money and audit notices. For individuals who receive audit notifications, determining what to do next is important.

One thing to remember is that the IRS will never contact you in any way except by mail to let you know that you’re being audited. Not all tax audits are the same. Some are more serious than others, so you should contact your tax professional and attorney to learn your options and find out what you should do.

Random audits

Random audits are an in-depth review of your tax return. The agents aren’t looking for specific things in your return. Instead, they are trying to ensure that the return doesn’t contain errors and that it is wholly valid.

Correspondence audit

A correspondence audit is the least serious option. Everything with this type of audit is handled via mail. This might mean that you have to send in proof of deductions or similar information. This is often the IRS’s chosen option when the expected issue is small or the return isn’t for much income.

Office audit

If you’re told that you need to bring information into an IRS office in person, you’re facing an audit that’s more serious than a correspondence audit. This requires you to gather the requested items, such as receipts and anything else listed on your audit documentation. Failing to bring in what’s asked for can mean that the audit won’t end in your favor.

Field audit

The field audit is the most serious one that you can undergo. This type involves that agents coming to your business or home to conduct the audit. Field audits happen much less frequently than the other types, so you must ensure that you take it seriously if you find out that the IRS is coming to you.

It’s a good idea to have a tax attorney represent you when you’re facing any type of IRS audit. This ensures that your rights are protected and that your side of the matter is explained appropriately. Working with your lawyer from the beginning of the audit is beneficial, so don’t put off getting this process started.

We insist that your taxpayer rights are protected and your options are known.

Our services are confidential and are protected under the attorney-client privilege as allowed by law.