Finding out you are going to be the subject of an IRS audit may have you feeling anxious, but not every audit plays out the way you might envision. Only a small number of individuals have to undergo audits, and the majority of those who do wind up doing them entirely by mail.
There are three main types of IRS audits: mail audits, in-office audits and field audits.
Mail audits
A mail audit involves you sending certain types of requested documentation to the IRS that verifies the information you included when you filed your taxes. You may never have to meet with anyone in person if the IRS audits you by mail, and especially if the documentation you provide via mail backs up your tax filing.
In-office audits
An in-office tax audit is a bit more daunting and involves you meeting an IRS representative in person. Such an audit may become necessary if the IRS wants to question you further about your taxes or has questions you may not be able to answer sufficiently via mail.
Field audits
Field audits are the ones that involve IRS representatives coming to your home or your office and doing a deep dive into your finances. You may have to take part in this type of IRS audit if the IRS sees major inconsistencies within your tax return or has numerous questions about why you filed the way you did.
When you speak with an IRS agent, whether in an office or your own home or office, remain polite and courteous. Answer questions asked of you, but try to avoid oversharing or discussing anything that may cause the IRS to look into prior years’ tax returns, too.