Q: What is a tax audit?
There are three types of audits. The first type is the Mail Audit. This is the simplest type of audit. It does not require you to meet with an IRS representative. You will merely get a letter in the mail questioning something you did on your tax return. Most of the time the IRS is just requesting further proof or documentation of something on the return. If you give it to them the audit will usually end in your favor.
The second kind of audit is called an Office Audit. This is an in-person audit conducted at an IRS field office with an audit officer. This is a more in-depth audit than a mail audit. You will be asked to bring specific books, records, receipts and information to the audit. At the audit you will be asked to explain any problems that the IRS is concerned with on your tax return. You do have a right to bring a representative such as an accountant or a lawyer with you to this type of audit. However, in our practice we appear at the audit without our taxpayer client. Our clients don’t have to talk to the IRS in most cases.
The third type of audit is called a Field Audit. This is the most comprehensive type of audit that the IRS conducts. In these types of audits an IRS auditor, called a Revenue Agent, will conduct the audit at your home or place of business. Revenue Agents are very thorough. They will be questioning your entire return and not just one or two deductions as might occur on the simpler audits. Many times these audits will last days. You are entitled to be represented at these audits as well.
It is never a good idea to go through an Office or a Field audit by yourself. The tax laws are complex and the auditors interpret them in a very strict manner. Saying the wrong thing or failing to be able to prove certain things in an audit can cost you a lot of money in extra taxes, penalties and interest. If you get a notice of audit from the IRS you should contact a tax lawyer immediately before you talk to the IRS. Not to get help in these situations could be very detrimental. Contact Attorney Sheldon Lazarow now at 520-623-5856 to get help with your audit problem.