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What happens when the IRS audits you?

On Behalf of | Jul 20, 2021 | Uncategorized

As a Texas taxpayer, you may feel anxious upon finding out the IRS plans to audit you. Even if you feel confident you did everything right when filing your taxes, you may feel understandable fear knowing an IRS representative plans to do a deep dive into your finances. However, try not to panic. Not every IRS audit leads to major trouble, and in some cases, you may be able to navigate yours without having to meet with an IRS agent in person.

Per the Motley Fool, when the IRS audits you, it does so in one of three ways: via a mail audit, an in-office audit or a field audit.

The mail audit

As the name implies, a mail audit has you send certain correspondences to the IRS via the mail to back up what you reported on your taxes. Sometimes, this is all you need to do to satisfy the IRS and answer any questions it may have. In fact, about 75% of all IRS audits take place entirely by mail.

The in-office audit

If the IRS needs more information from you than you are able to provide via mail, you may need to meet with a representative at your local IRS office. Should you choose to do so, you may bring an attorney or accountant to the meeting with you.

The field audit

A field audit is more thorough and time-consuming than the alternatives. This type of audit involves a comprehensive investigation into your finances and might involve an IRS representative visiting your home, place of business and so on.

Knowing what is coming down the line may help calm your nerves and help you navigate the audit process with minimal stress.