What is an IRS audit?

An IRS audit is an examination or review of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is accurate and complete.

Audit Selection

You’re probably asking yourself – why me? Selecting a return for audit does not always suggest that an error has been made. Returns are selected using a variety of methods, including:

  • Random selection and computer screening;
  • Document matching where payor records (such as W-2 Forms) don’t match the information reported;
  • Related examinations where returns are selected for audit when they involve issues or transactions with other taxpayers whose returns were selected for audit.

Audit Methods

An audit may be conducted by mail (correspondence audit) or through an in-person interview and review of the taxpayer’s records. The interview may be at an IRS office (office audit) or at the taxpayer’s home, place of business, or accountant’s office (field audit). The IRS will tell you what records are needed. Audits can result in no changes or changes. Any proposed changes to your return will be explained.