IRS Tax AuditsPractice Areas
IRS Tax Audits
An IRS audit is a review and examination of a taxpayer’s tax return to determine that information is being reported correctly, according to the tax laws, and to verify that the amount of tax reported is correct. IRS can audit an individual’s personal income tax returns, a corporation’s income tax returns, a corporation’s payroll tax returns, a partnership’s tax returns, and even a non-profit organization’s tax returns.
IRS has several methods of selecting tax returns for examination, including the following:
- Random selection and computer screening – sometimes returns are selected based solely on a statistical formula.
- Document matching – when payor records, such as Forms W-2 or Forms 1099, don’t match the information reported.
- Related examinations – returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.
Most audits are conducted through the mail. However, some taxpayers may be required to meet in-person with an IRS Revenue Agent at an IRS office. IRS audits may also be conducted at the taxpayer’s home, place of business, or accountant’s office. The IRS Revenue Agent will tell you what records to bring to the audit. Audits can result in no changes or changes in the taxpayer’s favor or in the IRS’s favor. Any proposed changes to your return will be explained in writing and you will have the option to appeal.
During an audit taxpayers are guaranteed certain rights, including:
- A right to professional and courteous treatment by IRS employees.
- A right to privacy and confidentiality about tax matters.
- A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
- A right to representation, by oneself or an authorized representative.
- A right to appeal disagreements, both within the IRS and before the courts.