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What is an audit?

On Behalf of | Mar 2, 2018 | IRS

Every year around this time Illinois residents begin scraping together their W-2s, donation receipts and other tax documentation so that they can submit their state and federal tax returns. Most of the time this is a boring and somewhat straightforward process, wherein a tax payer fills out their tax forms online or hands their tax documentation over to their accountant for submittal. After several weeks those tax payers who are lucky enough to not owe money will receive refund checks compensating them for the taxes they overpaid in the prior year.

However, there is another form of correspondence that a tax payer may receive regarding their returns and it is nowhere near as pleasant to receive as a refund: an audit statement. The Internal Revenue Service audits or reviews many tax payers’ returns each year for a number of reasons. Some audits are performed because the IRS has found possible issues in the documentation that the tax payers provided. Other audits are random checks to ensure the efficacy of the process.

When a tax payer receives a notice of audit they should not panic. Rather, they should pull together all of the documentation that they submitted for the relevant year’s taxes and carefully read the notice of why they are being audited. While some audits are easily handled through written correspondence, other audits may require a visit to a local IRS office or a visit from an IRS official to a tax payer’s home.

Whenever an audit is initiated against a tax payer by the IRS it can be helpful for them to have their letter and taxes reviewed by a tax attorney. Legal professionals who work in this specific field can advise their clients of their options and rights as they move through the tax audit process.