correspondence audit

What to Expect in an IRS Correspondence Audit 

If you’ve received a letter from the Internal Revenue Service asking for more information to support your tax return, then you have a correspondence audit on your hands. If this sounds like your situation, don’t panic — a correspondence audit can be straightforward and simple as long as you stay organized and understand the process.

In this article, we’ll explain how correspondence audits work and give you some tips to help manage the process.

What Is an IRS Audit?

A tax audit means the IRS is carefully reviewing the income tax return you filed, and they want you to provide proof that backs up some or all of the claims you made on the return.

For example, let’s say John claimed a $20,000 tax deduction because he gave $20,000 to his favorite charity. The government audits John and wants him to prove the deduction is legitimate. John will need a receipt or canceled check to show he did in fact give the money to charity.

Most people never get audited: every year, less than 1% of all tax returns get selected for an audit. Your odds of getting audited rise quickly as your income goes up and your tax return gets more complicated. However, the IRS can audit anyone at any time, so no one is “audit-proof.”

What Is a Correspondence Audit?

In a more traditional audit, the IRS agent communicates with the taxpayer directly and conducts meetings in person. With a correspondence audit, the whole process happens by mail. The IRS will send you a written request asking for more information, and you’ll mail a response. There are no meetings or phone calls — just letters.

Correspondence audits rarely involve very much back-and-forth communication. Usually, after you reply and provide the evidence and information the IRS is asking for, the next letter you receive will contain the agency’s decision. You can appeal this decision, so their initial ruling isn’t necessarily final.

Most people get scared as soon as they hear the word “audit” because they think of field audits and office audits, which can get very complicated and intrusive. However, correspondence audits are rarely like this.

A correspondence audit is usually considered the simplest and least serious form of audit. If the IRS initiates a correspondence audit, they probably aren’t looking to send you to prison or uncover huge amounts of back taxes — they just want some extra evidence to make sure the information on your tax return is accurate and proper.

Still, you need to take a correspondence audit seriously. The government is auditing you because they believe you may owe more than your tax return says, so they’re trying to get more money out of you. If the IRS decides your tax return wasn’t accurate and you owe extra tax, you could face fines and penalties on top of the additional tax liability.

Why Did I Get Audited?

There are lots of possible reasons the government selected you for an audit. Maybe you made a mathematical error or overlooked a source of income, or maybe you deducted a lot of business expenses or charitable donations, and it raised a red flag. Some taxpayers get audited for no other reason than the IRS selected them at random.

Because there are so many reasons you could have been selected for audit, it’s important to remember that being audited doesn’t mean you did anything wrong. Even perfectly accurate and legitimate returns sometimes look suspicious to the IRS. If you didn’t make any mistakes, then you just need to verify that all the information is correct.

Navigating a Correspondence Audit

If you’re facing any type of audit, it’s important to be proactive. You need to get organized and prepare to defend your tax return using evidence and documentation.

One of the best steps you can take to ensure a successful audit outcome is to work with an experienced tax attorney. A good tax attorney will know exactly how to handle the audit process. They’ll sit down with you for an interview to learn about your situation, give you an exact list of the documents you need to gather, and provide general advice that can help you move forward with confidence.

RELATED: The 2019 Audit Survival Guide: 6 Tips for Surviving a Tax Audit

Need Help Surviving Your Audit? Contact S.H. Block Tax Services

If you have any questions or concerns about an impending tax audit, please contact the tax attorneys at S.H. Block Tax Services. Our skilled attorneys have experience working with the IRS to resolve tax issues and protect taxpayers’ rights.

Schedule your free consultation today by calling (410) 872-8376 or using the quick and easy contact form on this page.

The content provided here is for informational purposes only and should not be construed as legal advice on any subject. Please read our full disclaimer here.


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