Under the IRS audit process, the selection of an individual or corporation for the audit may happen out of several reasons, starting with random computer selection, the difference in payor records and reported info, or if the account has issues or transactions involving other taxpayers.
The IRS will inform you via direct mail or telephone. The audit can be conducted through mail or in-person interview. The place of the interview may vary upon the availability of both the parties and in some cases the account holder is called to the IRS office itself.
The IRS will provide a written request for the documents necessary for the audit. Always maintain tax records for up to three years after the filing of returns. The IRS does accept some records in an electronic format.
You are allowed to ask about the reason for audit and even have a qualified representative accompany you during the audit process.
The findings of an audit may vary among no changes, agreed changes, and disagreed changes. Under the first, the IRS finds the returns consistent with the available information and requires no changes. In agreed changes, the account holder agrees to the IRS changes and sign the examination report. In disagreed changes, the account holder doesn't agree with the changes, resulting in further review or participant in Appeals Mediation Programs.
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