Tax Audit

 A tax audit is a review of an individual or business' tax returns by the Internal Revenue Service (IRS) or state tax agency. The purpose of the audit is to ensure that the information reported on the tax return is accurate and that the correct amount of taxes has been paid.

The audit process begins with a letter from the IRS or state tax agency informing the taxpayer that their return has been selected for review. The letter will indicate the specific items on the return that are being questioned, and will typically request additional documentation to support the information reported on the return.

The taxpayer has the option to respond to the letter and provide the requested documentation by mail or in person. If the taxpayer chooses to respond by mail, it is important to keep a copy of all documents for their records. If the taxpayer chooses to respond in person, they will typically be scheduled for an appointment at a local IRS office.

During the audit, the taxpayer will have the opportunity to meet with the auditor and discuss any issues or concerns they may have. The auditor will review the documentation provided by the taxpayer and may ask additional questions. The auditor will also have the right to examine any books, records, papers, or other data that may be relevant to the audit.

The outcome of the audit can result in one of three options:

1. No change - the auditor finds that the tax return is accurate and no  adjustments are needed
2. Agreed change - the taxpayer agrees with the changes proposed by the auditor and pays any additional taxes owed
3. Disagreed change - the taxpayer disagrees with the changes proposed by the auditor and can appeal the decision
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Note that the audit process can be stressful, but taxpayers have rights and options throughout the process, including the right to appeal any decisions made during the audit process. 

It is highly recommended to hire a tax attorney to represent you during the audit process, as they have the knowledge and experience to navigate the process and help you reach the best outcome.