It’s likely every individual or business in Texas knows that Internal Revenue Service tax audits exist, but they might not realize that there are different types of audits. Audits occur when the IRS decides to more closely examine your tax return. Sometimes this occurs because there is a red flag or mistake on the return; other times, your return simply comes up as part of random auditing.
Three main types of audits exist: field audits, office audits and mail audits. Field audits are perhaps the most intense, because they involve an IRS agent coming into your home or business to inspect your records. Usually, a field audit occurs when the IRS is concerned about a number of issues, and the review covers more than information related directly to your return.
Also intense, but less intrusive than a field audit, is the office audit. In this type of audit, you are scheduled for an appointment at a local IRS office and asked to bring a number of pieces of information. You may be questioned by an agent at the office about data on your return.
The least intensive audit is the mail audit, which involve the IRS requesting extra information via mail. Usually, the IRS is just looking for further documentation to support information claimed on your tax return, such as receipts to backup claims about charitable contributions. Responding quickly and completely to a mail audit usually clears up issues and may keep you from having to deal with an office or field audit.
Any type of IRS audit comes with risks, so it’s important to get into the issue well prepared. This is especially true if you know you made a mistake on taxes or owe money. A tax attorney can provide information and guidance during audits.
Source: Intuit, “What Are Tax Audits?” Dec. 18, 2014
