How Is the IRS Correspondence Exam And Field Audit Different?

How Is an IRS Correspondence Exam Different From a Field Audit?

A surprising degree of mystery surrounds the modern IRS auditing process. Many people fear audits, in part, because they assume that these involve scary IRS agents visiting them at home. In reality, however, many audits are centered around paperwork, rather than in-person interactions.

Often, today’s audits take place entirely by mail. This approach is typically referred to as the correspondence exam. Understanding the many differences between this and the field audit is key to streamlining both processes. To help, we’ve highlighted a few key distinctions:

Which Situations Lead to Audits?

Correspondence audits are typically reserved for basic tax concerns that aren’t overly technical. The goal? To resolve problems as quickly and easily as possible.

Typically, just a few discrepancies will be referenced within the audit letter. These can nearly always be addressed by submitting a few documents. With a field audit, however, tax issues may be too complex to be resolved by mail.

How Much Time Does It Take?

Timelines can vary dramatically for audits; even within the same category, two distinct audits may take substantially different amounts of time to complete. In general, however, correspondence audits require several months to resolve. This process can sometimes be hastened if a tax resolution specialist gets involved.

With field audits, the in-person portion might not last long — but a resolution may not be available for a year or longer. Because the tax issues underlying these audits are more complicated, they require in-depth examination.

No matter which type of audit you’re forced to undergo, it’s worth your while to get a trusted tax resolution expert on your side. An enrolled agent can streamline the process while helping you avoid potentially expensive mistakes. The Highland Tax Group is an excellent resource, so don’t hesitate to get in touch today.