Types of IRS Audits
An IRS audit is an attempt made by the Internal Revenue Service to verify that all information presented by individual and business federal tax returns is accurate. The IRS will examine all taxes owed by an individual or business, as well as annual income and all tax related deductions. There are 3 different types of IRS audits determined by the amount of revenue reported.
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Correspondence Audit
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A correspondence audit is the most common type of audit. This audit is completed through mail correspondence. The IRS will ask to be mailed some form of documentation that the information provided in certain areas of the tax return is correct. Examples of acceptable forms of documentation are sale of real estate receipts and stock transactions.
Office Audit
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This type of audit occurs when the IRS sets up a meeting time, place and date to discuss certain areas of the tax return with an individual or business. Before the meeting, the IRS will notify the individual or business of specific documentation to bring to the meeting. If an office audit occurs, it is best to consult a tax attorney in order to be better prepared for what to say during the meeting.
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Field/Home Audit
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A field/home audit is the most serious form of audit. This occurs when the IRS travels to an individual home or business office. Usually field/home audits are only given to individuals earning over $100,000 a year and have a greater chance of accidentally or purposely providing false information on tax returns. During a field/home audit, an IRS auditor will examine all forms of documentation provided by the individual that proves all information listed on tax returns is accurate.
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References
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