Not many California taxpayers wind up becoming the subject of a tax audit, but it does happen. Most of the time, it happens because something a taxpayer does when filing taxes attracts the attention of the IRS, prompting the service to take a closer look at the situation. If you receive a notice telling you that the IRS plans to audit you, you may feel better about the situation if you have a solid understanding of what it might entail.
Per U.S. News and World Reports, you should expect your tax audit to occur in one of the following three formats.
Correspondence audits
Most people who have the IRS audit them must participate in correspondence audits. Typically, a correspondence audit, or “mail audit,” takes place entirely through the mail, without you having to meet with anyone in person.
Office audits
An office audit is often more intensive than a correspondence audit. You should expect to have to attend a meeting at an IRS office near your home that may last several hours.
Field audits
Most taxpayers fear field audits the most, and these fears may have merit. Field audits are the most intensive of all three audit types and may become necessary if the IRS has major questions or concerns about how you filed your taxes. This audit type might involve IRS agents taking a deep dive into your personal and business finances and may take several days to complete.
Regardless of what audit type you have ahead of you, try not to panic. Remember, too, that you maintain certain rights when the IRS audits you.