What Happens During an IRS Audit
An IRS audit is an examination of your tax return to verify that your income and deductions are accurate. There are three types: correspondence audits conducted by mail, office audits at an IRS office, and field audits at your home or business. Field audits are the most intensive and carry the highest risk.
Why Representation Matters
The IRS auditor has one job: find money. They are trained to ask open-ended questions designed to get you talking. Every word you say is documented. Casual comments like "I usually pay for that in cash" can trigger a much broader examination.
When I represent a client in an audit, I handle all communication with the examiner. My client does not attend the audit. They do not answer questions. They do not hand over documents. I control what information the IRS receives and how it is presented. This is not about hiding anything. It is about not volunteering information that expands the scope of the audit.
Common Audit Triggers
High deductions relative to income. Large charitable contributions. Home office deductions. Rental property losses. Cash-intensive businesses. Cryptocurrency transactions. Foreign bank accounts. The IRS uses statistical models called DIF scores to flag returns that deviate from the norm for your income level and occupation.
The Audit Timeline
The IRS generally has three years from the date you filed your return to audit it. This extends to six years if you underreported income by more than 25 percent. There is no statute of limitations if you filed a fraudulent return or did not file at all.
After the Audit
If the auditor proposes changes, you have the right to disagree. You can request a conference with the auditor's manager. You can appeal to the IRS Office of Appeals. And if all else fails, you can petition the United States Tax Court. Most audit disputes are resolved before they get to court, but having an attorney who can litigate gives you leverage in negotiations.