What is IRS Audit, Types, and Why You Should Hire a Professional? | Nationwide Tax Consulting

An IRS audit is a review of an organization's or individual taxpayer's financial information to verify that the figures reported to the IRS are correct, follow the relevant tax laws and report the right amount of tax due. An IRS audit may take place via correspondence, at an office, or the taxpayer's place of business or accountant's office. IRS doesn't audit an individual or business unless they find anything questionable in your filing. 

Many things can lead the IRS to audit you if you have not been honest in the filing. There are three types of IRS audits, which are the following:

  • Correspondence audit. Conducted via writing and not face to face with an auditor. In the fiscal year 2018, nearly 75% of audits were conducted via correspondence, according to the IRS.
  • Office audit. You'll generally have to meet with an auditor in person, Pinck says. Expect to meet at an IRS office and for the experience to last between two and four hours.
  • Field audit. The auditor may come to your place of business or records office. Expect this to last a day or longer.

When you receive a notice from IRS for getting audited, if you are panicked, it reasonable; don't worry and take a deep breath. First of all, check what sort of mistakes you have made i.e., why IRS auditing you and consider hiring an expert or a professional agency such as Nationwide Tax Consulting to help you to get out of this situation. 

Professionals can represent you to the IRS and can help you with answering questions from the IRS. Remember that you have rights when you're being audited by the IRS. Those include the right to professional treatment by the IRS auditor and a right to representation. You also have a right to appeal within the IRS and the courts.

Finally, a word to the wise: If the result of an audit is that you owe additional tax to Uncle Sam, it may also impact your state return. Look into amending your state return as soon as possible to limit fees and penalties.

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