Audits are triggered by issues with your tax return, either because something appears irregular, incorrect, or because people associated with you, such as your business partners, are being audited as well. This dreaded process is often filled with stress and fraught with mixed emotions, The good news is that riding out an audit doesn’t have to be scary or intimidating, as long as you have professional tax accounting guidance and representation.
Different Types of Audits
Did you know that there are three different types of audits? Each is conducted by agents from the IRS or the state in which you reside in or filed taxes. Some types are more complicated or in depth than others. The audits you may be subject to are as follows:
- A Correspondence Audit
- An Office Audit
- A Field Audit
Now that you understand the differences between the types of audits, let’s take a look at both an IRS audit and state audit. Really, the names make the differentiation clear. An IRS audit is one conducted by the IRS, the main tax collector for the federal government. A state audit is pursued by officials of the state that you reside in. While IRS audits are much more common, having one requested by them often triggers a state audit as well, because any discrepancies found are likely to affect both parties. You might undergo an IRS audit only to find that the state wants to examine your records as well, once the federal government is done.
Seeking Professional Help with the Audit Process
Have you received notices about an impending IRS audit or state audit? If so, you’ll need assistance gathering the proper documentation and records to protecting yourself, your business, and your assets during the process. Seeking the guidance of a professional tax accounting firm can drive optimal results and help you navigate this process as painlessly as possible.
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