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IRS audits: one size does not fit all

The word "audit" comes from the Latin word for the hearing of sound. It comes from the same source as the word "audible," meaning able to be heard.

Today, however, the word is closely associated not with listening, but with the formal review of the activities of another. Tax audits at the state or federal level are a specific example of this. And IRS audits are an even more specific example.

Taxpayers in Southern California and across the nation should be aware, however, that IRS audits are not all the same. There are several different types.

Among the general public, many people probably associate the word audit with a certain type of audit - namely a field audit. A field audit involves a visit by an IRS agent to a taxpayer's home or office. The agent may be looking for evidence of tax evasion and demand that a taxpayer bring various forms of records and documentation relating to a tax return.

Understandably, a field audit can put a lot of pressure on a taxpayer. Literally and figuratively, the IRS is in your space. Many taxpayers therefore choose to face them only with legal representation.

In many cases, however, the IRS initiates the audit process with a much more low-key procedure called a correspondence audit. It's called a correspondence audit because it is initiated through the U.S. mail - obviously a rather old-fashioned avenue of communication in a digital age of instantaneous communication.

In a correspondence audit, the IRS may ask for more information about a specific question, such as tax deductions for charitable contributions or tax credits for certain educational expenses.

Field audits and correspondence audits are not the only types of IRS audits. But we will start with those in this post for vocabulary-building purposes.

Source: Fox Business, "4 Types of IRS Audits: What to Know and How to Prepare for Each One," Donna Fuscaldo, June 17, 2013

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