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Process

Selection Process IRS contact taxpayer who has been selected for audit only by mail. They will never initiate an audit by phone call or in person. Documentation The following are documentation that the IRS may request: receipt, invoice, bank statement, cancelled check. It’s best to organize these documents by their tax year. Furthermore, it is important to provide the total amount summary in addition to the detailed transaction. If taxpayer can’t provide source documentation for particular amount, they may explain why it was missing and how they calculated the amount. IRS ask to only send copies of these documents as originals can get lost or damaged.

Review Review Examinations of documents are conducted in a taxpayer’s home, business, or an Accountant’s office. Further instructions will be provided in the IRS Notice Letter. Conclusion The IRS can audit a tax return and its documentation and conclude that there is no change. On the other hand, IRS can propose a new amount. The taxpayer can either agree or disagree with this amount. By agreeing, the taxpayer must sign an agreement and may have to pay the additional amount. If a taxpayer disagree, they may request a meeting with an IRS manager, file an appeal or participate in an Appeals Mediation, where an an appeal officer will help resolve the case.

Selection Method Related Examination IRS selects taxpayers who are involve with other taxpayers who have recently been selected for audits, such as business partners or investors