1% of taxpayers are audited by the IRS. Although this seems minute, this amounts to over 1.5 million people each year. IRS tax audits occur when the IRS locates an error or inaccuracy in a tax return. The IRS may require you to make changes to your account or provide more information about the filed tax return. Audits can take several forms, including correspondence audits, interview audits, and field audits.
Correspondence audits are the simplest form of audits. Received in the mail, this audit requests documentation to prove the information given in the tax return.
An interview audit occurs when an individual must go to an IRS office and answer a series of questions about his/her tax return. Additional information and documentation is often also needed to satisfy the IRS.
Field audits will often occur when multiple issues are found in a tax return. An IRS agent will come to a taxpayer’s home or office in order to acquire additional information. These audits occur when the IRS finds a serious issue with the tax return.
Obtaining an attorney is advised for any category of audit that may transpire. In addition to protecting your rights, an attorney can guide you as to how to properly and successfully answer probing questions. IRS auditors typically do not disclose how or what the provided information will be used for although taxpayers have the right to know. From the IRS perspective, the purpose of an audit is to assess more tax and assess penalties. A skilled attorney will fight on your behalf to keep those assessments to a minimum. If necessary, an attorney also knows how to successfully navigate the appeals process.
Audits may also be received from the Illinois Department of Revenue. Like IRS audits, IDoR audits occur when an inaccuracy is found in a tax return. These audits are presented in the form of a phone call, letter or visit. Your attorney is your best advocate for any received tax audit.