Done through the mail, a correspondence audit is commenced when the IRS computers find an error on your tax return. You will be told of the discrepancy on an IRS notice and you’ll be asked to send documentation to support your tax return. You’ll either be issued a refund or requested to settle the additional taxes if the error is mathematical. Click here to watch or read more information on IRS Back Taxes.
Be glad that you were not chosen for a face-to-face audit and cooperate with the correspondence audit. Remember that it’s very important to keep duplicates of your return and any supporting documents for audit or other IRS problem purposes.
Regardless of what the IRS’s request is, compare a copy of the return with what’s written on the IRS notice to verify the necessity of a correction or the need for additional taxes. Investigate further before mailing the requested additional taxes to the IRS. Mistakes are common in the IRS.
It’s important that you do not dismiss the IRS notice. You will be in big trouble if you ignore the notice. Read it carefully and quickly follow the instructions.
If you don’t agree with the IRS notice, follow the instructions on it promptly. Attach documents that will support you. Mail the signed and dated IRS notice with the requested payment if you agree with it.
Once your claim is received, the information is validated and the IRS will decide if it should be allowed. This ends the audit and you’ll be notified. If the IRS disallows your claim, you’ll be sent an Examination Report. You’ll have to either accept the changes and sign it or appeal the IRS ruling within 30 days.
The name and phone number of the auditor handling your case will be listed on the IRS notice, so you may call him for questions about the audit.