If you are selected for an audit, you will be notified by the IRS. There are various types of audits. In some cases, everything will be handled by correspondence. The IRS will send you a letter asking for clarification or documentation for specific items on your return. You can send the information back by mail. If the IRS determines that you owe additional taxes, they will certainly notify you by mail.
When the examination or audit is conducted at a local IRS office, that is referred to as a desk or office examination. Most individual return audits are handled at local IRS offices. Normally, it would be at the IRS office closest to your home.
A field examination is normally done for a business return audit. This means that the IRS agent handling the audit would come to your place of business.
As soon as you are notified that your return is being audited, you should review your return, and gather any supporting documentation that has been requested, or that would support the reported information on your return. You may choose to have someone represent you before the IRS. This person could be an attorney, a CPA, or an enrolled agent. If you have completed Form 2848, your representative can go to the audit without you.
Once the audit has been completed, the Internal Revenue Service will determine if you are liable for any additional taxes, as well as interest and penalties. If any fraud is discovered, a 75% penalty will be applied to the whole underpayment amount.
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