It might be intimidating to deal with the IRS, particularly if you get an audit letter. Gaining knowledge about the various kinds of IRS audits and their contents will enable you to handle the procedure with more efficiency. But it's important to understand that managing an audit is not a do-it-yourself project. The outcome might vary significantly with professional aid.
Here, we describe the three primary forms of IRS audits—Office, Field, and Correspondence audits—and discuss why getting expert assistance is crucial.
Correspondence Audit
What It Involves:
The most prevalent and least invasive kind of IRS audit is a correspondence audit. It's done fully by mail and usually addresses certain problems or anomalies in your tax return. You will receive a letter from the IRS asking for further details or proof to back up certain things on your return, including income, credits, or deductions.
Steps Involved
1. Receiving the Notice: The IRS will send a letter outlining the specific issues they want to examine.
2. Gathering Documentation: You will need to collect and organize the requested documents, such as receipts, bank statements, or other relevant records.
3. Responding to the IRS: You must mail the requested information back to the IRS by the specified deadline.
4. Review by the IRS: The IRS will review the submitted documents and determine whether any adjustments to your tax return are necessary.
5. Final Decision: You will receive a final notice from the IRS detailing any changes to your tax liability.
Why Professional Help is Essential
Even though a correspondence audit could appear simple, errors can easily be made that could have negative effects. A tax expert may assist you in obtaining the necessary paperwork, making sure your answer is accurate and comprehensive, and handling correspondence with the IRS on your behalf. This knowledge may greatly lower the possibility of mistakes and raise the possibility of a successful outcome.
Office Audit
What to Expect
Compared to a correspondence audit, an office audit entails meeting with an IRS auditor in a local IRS office and is more involved. This kind of audit usually concentrates on more complicated matters and might need a careful examination of several different sections of your tax return.
Steps Involved
1. Receiving the Notice: The IRS will send a letter requesting that you schedule an appointment at a local IRS office.
2. Preparing for the Audit: You will need to gather extensive documentation to support the items under review, such as financial statements, receipts, and other records.
3. Meeting with the Auditor: During the appointment, the IRS auditor will ask questions and review your documentation in detail.
4. Providing Additional Information: If the auditor requests further information, you may need to provide additional documents or explanations.
5. Final Decision: After the audit, the IRS will issue a report detailing any changes to your tax liability.
Why Professional Help is Essential
An office audit may be difficult and daunting. A tax expert can assist you with your complete preparation, making sure you have all the required paperwork and are aware of any potential questions. They could also be able to speak on your behalf at the audit, offering professional advice and relieving some of the pressure on you to take part. Their experience may handle the audit more skillfully and get a better result.
Field Audit
What It Entails
The most thorough and invasive kind of IRS audit is called a field audit. It entails an IRS agent coming to your house, place of business, or tax advisor's office to carefully review your financial documents and tax return. Usually, the IRS reserves this kind of audit for more complicated situations or where there are apparent disparities.
Steps Involved
1. Receiving the Notice: The IRS will send a letter notifying you of the audit and scheduling a visit.
2. Preparing for the Audit: You will need to gather extensive documentation, including financial statements, receipts, and other records.
3. Meeting with the Auditor: The IRS agent will visit your location and conduct a detailed review of your records, asking questions and requesting additional information as needed.
4. Providing Additional Information: You may need to provide further documentation or explanations during and after the visit.
5. Final Decision: After the audit, the IRS will issue a report detailing any changes to your tax liability.
Why Professional Help is Essential
The hardest audit to complete independently is a field audit. The stakes are frequently higher and it may be quite stressful to have an IRS agent in your house or place of business. A tax expert can assist you with your complete preparation, making sure you have all the required paperwork and comprehend the procedure. Additionally, they may represent you in the audit, offering professional advice and relieving the burden of dealing with the IRS on your own. Their knowledge might make the procedure go more smoothly for you and provide better results.
How to Get Help
It's critical to comprehend the many IRS audit kinds and what they include, but it's also critical to acknowledge that managing an audit is not a do-it-yourself project. Having expert help may have a big impact on the result and guarantee that you are properly represented and well-prepared for the whole procedure.
Having to deal with the IRS may be difficult and confusing. Give the heavy lifting to our office. Get in touch with us right now to find out how we can guide you through the audit process and help you get the best results.
