IRS Increasing Audit Rates By Getting Smarter- They Are Conducting More Correspondence Audits.
The IRS has finally realized they do not have enough auditors, which on the surface sounds like a good thing. Here is the bad news; they have also realized they can conduct five times the number of “correspondence audits” in the time that it takes to perform one field audit. Does that mean I am saying the IRS is trying to increase the audit rate by 5 times? Yes, THAT is exactly what I am saying!
So What Is A Correspondence Audit?
A correspondence audit is an audit that is conducted through correspondence. In a correspondence audit the IRS sends you a notice directing you to provide information and support for one or several items on the return.
What You Should Not Do!
Do not automatically assume the notice is correct and send a check for the balance due. The IRS is often incorrect or misinformed. This could be related to the way the information was presented (missing form) or the way the return was processed.
Also, do not ignore the audit notice! If you ignore notice, the IRS will move to collections on the notice that you received.
So What Do You Have To Do?
You will need to review the notice received and break it down to determine what information, forms or supporting documentation the IRS is requesting. Next, you will need to determine if you have the requested information. Last and most critical, you will need to determine if the information you are provided with will fully address the issue(s). If the information is not readily attainable or does not adequately represent your position, I would suggest you request more time.
When Should I Try To Handle This On My Own?
If the requested information is simple or you feel that you can provide the information that fully and adequately addresses the issue(s), representing yourself may be appropriate. Please remember the largest number of criminal referrals stem from the audit unit. Be very careful with what you submit!
When Should I Get Some Help?
If you feel totally outside of your comfort zone, believe that you cannot properly address the IRS issue(s) or feel you could make things worse, seek representation. Remember we are here to help!
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