Robert J. Fedor, Esq., L.L.C.

Know the type of audit you're facing

There are few things most of us dread more than learning of an impending IRS audit. While most of us try our best to accurately report and pay taxes, given the complex tangle of legalese that is the U.S. tax code, most of us also know that if our return is strictly scrutinized, the IRS will be able to find some place where an "i" wasn't dotted or a "t" wasn't crossed.

That being said, an audit is not always cause to be alarmed. By knowing the general distinctions between the four basic types of audits, you can make a better judgment about when it is time to call in professional help.

It shouldn't surprise you to learn that some types of audit are more serious than others. A correspondence audit, for instance, is when the IRS sends you a letter asking about something in your tax return, like a deduction for which you did not previously include a receipt. If you still have the receipt (or whatever documentation is needed to back up the claim made on your return), it's usually just a matter of sending it in to the IRS.

Random audits also may not be as serious, as the IRS is not looking for anything in particular and your return did not raise any immediate red flags. However, you should be aware that while a correspondence audit is generally limited to review of the one area in question, the IRS will comb through your entire return in a random audit.

Office and field audits are the more serious types of audits, and you should seriously consider having legal counsel present at either. In an office audit, you will be asked to come in to an IRS field office, while in a field audit, an IRS agent will visit your house or your place of business.

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