Receiving a letter from the IRS about an audit can be stressful, especially if you’re unsure what to expect. While every audit is unique, understanding the different types of IRS audits can help you prepare and manage the process more effectively. Whether you’re facing a correspondence audit, an office audit, or a field audit, knowing what lies ahead can ease some of the anxiety.

What is an IRS Audit Letter?

An IRS audit letter is a notice from the IRS informing you that your tax return has been selected for review, a formal tax audit. This letter verifies the accuracy of your tax return and ensures all reported income, deductions, and credits are correct. Receiving this letter does not necessarily mean you made a mistake; it simply means the IRS wants to examine your return more closely.

Correspondence Audits

A correspondence audit is the most common and straightforward type of IRS audit. These audits are typically conducted entirely through mail and are often used to address minor issues that can be resolved quickly with additional documentation. The IRS selects correspondence audits when they believe that the problem can be fixed with a simple exchange of information.

Why You Might Be Subject to a Correspondence Audit:

• Mathematical Errors: Simple math errors on your tax return, such as incorrect addition or subtraction, can trigger a correspondence audit.
• Mismatched Information: If the information reported on your tax return doesn’t match the data the IRS receives from your employer, bank, or other third parties, a correspondence audit is likely. For example, if your W-2 reports higher income than you listed on your return, the IRS will seek clarification.
• Missing Forms: Failing to include required forms, such as a 1099 or Schedule C, can also lead to this type of audit.

What to Expect:

• Initial Letter: You’ll receive a letter from the IRS outlining the specific issue they’ve identified. The letter will request that you provide documentation to support the information on your tax return.
• Documentation Review: You’ll need to gather and submit the requested documents, such as receipts, bank statements, or other relevant records. Make sure to send exact copies, not originals, as you’ll need to keep the originals for your records.
• IRS Response: After reviewing your documents, the IRS will either accept your explanation and close the audit or request further information. If discrepancies are found, they may adjust your tax return and issue a bill for any additional taxes owed.

Office Audits

Office audits are more intensive than correspondence audits and require you to meet with an IRS agent in person. These audits usually take place at an IRS office and involve a detailed review of specific aspects of your tax return. Office audits are often triggered when the IRS suspects more significant issues or inconsistencies that cannot be resolved through correspondence alone.

Why You Might Be Subject to an Office Audit:

• High Deductions: Claiming unusually high deductions compared to others in your income bracket can raise red flags for the IRS. For example, if you claim a large charitable donation that seems disproportionate to your income, the IRS may want to investigate further.
• Unreported Income: If the IRS believes you’ve failed to report income, especially from freelance or side jobs, they may call you in for an office audit. This can happen if there are discrepancies between your reported income and the 1099 forms the IRS receives from payers.
• Complex Financial Situations: Tax returns that involve complex financial situations, such as those with multiple rental properties, extensive investments, or complicated business expenses, are more likely to be selected for an office audit.

What to Expect:

• Scheduling the Audit: You’ll receive a letter from the IRS requesting an appointment. The letter will specify the issues under review and list the documents you need to bring, such as receipts, bank statements, or other records that support your tax return.
• In-Person Meeting: At the IRS office, an agent will review your documents and may ask questions to clarify certain aspects of your return. It’s important to be well-prepared and to bring all requested documentation, as incomplete or missing records can result in unfavorable outcomes.
• Potential Adjustments: After reviewing the information, the IRS agent may propose adjustments to your tax return. You’ll have the opportunity to agree with these changes or dispute them. If you disagree, you can present additional evidence or appeal the decision.

Field Audits

Field audits are the most thorough type of IRS audit, conducted at your home, business, or your accountant’s office. These audits involve an in-depth examination of your financial records and are typically reserved for complex tax returns or situations where the IRS suspects significant discrepancies. Field audits are generally more intrusive and time-consuming than other types of audits.

Why You Might Be Subject to a Field Audit:

• Business Income and Expenses: If you’re a business owner or self-employed, the IRS may conduct a field audit to verify your income and expenses. This is especially likely if your reported income appears inconsistent with industry norms or if you’ve claimed substantial business expenses.
• Large Cash Transactions: Engaging in large cash transactions, such as substantial cash deposits or withdrawals, can attract the IRS’s attention. The IRS may conduct a field audit to ensure that these transactions are properly reported and taxed.
• Prior Audit History: If you’ve been audited in the past and discrepancies were found, the IRS might be more inclined to conduct a field audit if they suspect ongoing issues.

What to Expect:

• On-Site Visit: An IRS agent will visit your home or business to conduct the audit. The agent will review your financial records, observe your operations, and may interview you and your employees. This type of audit allows the IRS to get a closer look at your business practices and financial activities.
• Extensive Documentation: Field audits require a comprehensive collection of documents, including financial statements, receipts, invoices, ledgers, and other records. The IRS will scrutinize these documents to ensure accuracy and compliance with tax laws.
• Detailed Scrutiny: Because field audits are so thorough, they can take several weeks or even months to complete. The agent may ask for additional information or clarification throughout the process. It’s essential to be organized and cooperative to facilitate the audit and avoid unnecessary complications.

Take Control of Your IRS Audit

Dealing with an IRS audit doesn’t have to be a nightmare. If you’re unsure what to do if you receive an audit letter, The Law Offices of Alyssa Maloof Whatley in Atlanta are here to help you through every step of the process. Our team has the experience and knowledge to handle any type of audit, from simple correspondence audits to complex field audits.

Don’t face the IRS alone—contact us now at  to schedule a consultation and ensure you’re fully prepared to resolve your tax issues.