What Is An Audit?

An audit starts with a written letter, a written notice, or even a phone call from the IRS.   The IRS examines (audits) tax returns to determine if income, expenses, and credits are being reported accurately.

The IRS will want to schedule the audit at your home, your place of business, or sometimes at an IRS office.   They will provide a list of records you will need to organize before the audit appointment.

There are many ways that a return can be selected for examination.   The IRS uses computerized screening, random sampling, and income document matching.   Every tax return is actually looked at, page by page, at one of the various service centers around the country.   The IRS can select your return to examine a questionable item or to study the behavior of similar taxpayers (a market segment) in handling a particular tax issue.  Returns are also selected based on information received from other sources, like the media, public records, or informants who have given IRS reason to believe your return has been prepared incorrectly or not in compliance with the tax laws.  Tax returns are also selected because of suspicion of involvement in a Special Project.

See the listing for the Eight Types of Audits.

 

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You must purchase your membership prior to being selected for audit.
The day your audit notice is issued is one day too late!