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A tax audit could come in different forms

| Aug 11, 2020 | Tax Controversies |

Even though the tax season has officially come to a close (finally), some New York residents may still worry about how the IRS will handle their tax information. In particular, they may have concerns about facing a potential audit. Even if individuals report everything correctly, they could still end up under further scrutiny from the government agency.

If a person does receive notice of an audit, it is important to remember that there are different types. For example, the IRS may want to conduct a correspondence audit with a taxpayer, which is one of the most common types and is relatively easy to address. Essentially, the agency wants more information to verify that certain information provided by a taxpayer is correct. The taxpayer may then send back records or whatever documentation is necessary to prove that the information is correct.

In some cases, a correspondence audit will not cover the issues the IRS wants to address. As a result, an office audit or a field audit could occur during which an IRS agent and the taxpayer will have an in-person meeting to discuss the multiple concerns pertaining to the tax return. With an office audit, the taxpayer will go to the appropriate IRS office for the meeting, and a field audit would involve the IRS agent coming to the taxpayer’s business, home, or attorney’s or CPA’s office.

Receiving notice of an audit can be nerve-wracking, but it does not necessarily mean that a taxpayer has done something wrong. If New York residents receive this type of notice, it may be wise for them to start protecting their interests as soon as possible. Often, consulting with knowledgeable tax attorneys can help parties handle this issue effectively.