An IRS audit starts via an examination of a person or company’s reported revenue, expenditures and additional monetary facts described on the tax return that is recorded to reflect their fiscal activity. A tax audit reviews the reported figures to insure that it was filed properly based on the tax laws and indemnifications that are on record during the twelve month period the taxes were filed.

IRS Audit Notifications
An individual will be contacted by mail or phone, as an official notification that a tax audit has been levied against their person or company. Within this notification will be an outline of the return information that will need to be verified to conclude the IRS audit.

How is One Chosen for a Tax Audit?
Whenever a person or company files their tax returns, the information submitted in the required fields is lined up with other similar statements that fit their statistical categories as researched by the Internal Revenue Service. Once the return is reviewed by someone who is experienced in the field of the return, the accountant will either approve the filed return as is, or set it aside for a full tax audit. Should it be rejected for clearance, the first phase of verification requests are made.In addition, a varying lottery pick may choose a return because it meets a statistical formula.Another tax audit inducer is when documents do not match, such as W-2s or 1099s. In extenuating circumstances, individuals or businesses can be audited as a result of their investors or business partners undergoing an IRS audit.

Responding to an IRS Audit
It is possible to respond to a tax audit solely by mail. If the IRS provides an individual with a list of items needed to clear the tax audit from contest, the tax payer can simply make copies of this paperwork and submit it to the IRS via mail. An IRS audit can also be countered by returning the requested materials to a local IRS office, or by scheduling a meeting with an IRS agent at your company’s physical location, allowing all paperwork to be accessed at once.

Tax Payer Rights
Individuals have the right to be treated courteously and professional by all IRS agents, and are entitled to a right to privacy and confidentiality when dealing with tax issues. Also, individuals have the right to know exactly what the requested documentation will be used for, and why they are being asked to submit it for verification. Furthermore, each person has the right to have a third party representative oversee the audit, and the right to appeal any disagreements put forth by the agency, even in a court of law.

How It All Ends
One of several conclusions are likely once the audit is over. All of the information was submitted successfully, voiding any initially outlined changes put forth by the IRS. Second, the tax payer agrees to the changes the IRS audit has acknowledged and pays the charges as a result. Finally, the audited individual does not acknowledge the changes as accurate, but understands that the resulting changes are their responsibility.