IRS Audits – Types of IRS Audits
The Three Types of IRS Audits – Hot, Hotter, Hottest
CORRESPONDENCE AUDIT– The least threatening, most common audit. The entire matter is handled through exchange of letters and documents via mail.
Such audits are generally limited to a few items or issues that can be easily proved by mailing copies of bills, checks, receipts or other relevant documents. Frequently, an auditor only wants to check a deduction that is larger than those usually taken by people in your income category.
OFFICE AUDIT. You’ll face this if your audit letter gives an appointment time and asks you to bring certain records to the IRS office. The IRS policy guide lists the issues covered in an office audit. This can include income from tips, pensions, annuities, rents, second jobs, capital gains and losses, complex casualty and theft losses and bad debts.
FIELD AUDIT. IRS auditors come to your business, your home or your tax advisors This kind of exam is more extensive and is reserved for large or complex returns, or cases in which the IRS suspects big underpayments.