IRS Audits: Understanding the Process and Importance of Preparedness for U.S. Taxpayers
An IRS audit is an examination of a taxpayer's returns to verify the accuracy of reported income, deductions, and credits. Audits can be initiated randomly, due to unusual numbers flagged by a computer system, or because reported figures do not match information from employers or banks. Receiving an audit notice, typically via mail, requires prompt attention. The notice specifies the tax year under review, the items being examined, and the response deadline. Taxpayers are advised to carefully read the letter, copy it, record the deadline, and store it securely. During an audit, the IRS usually requests specific documents such as receipts for income and expenses, and proof for deductions or credits. The audit process can vary, from correspondence audits conducted by mail to office audits at an IRS location, or field audits at a taxpayer's business or residence. Taxpayers have the option to be represented by a tax professional.
