IRS TAX AUDITS – DIFFERENT TYPE OF IRS TAX AUDITS – TAX AUDIT DEFENSE – FORMER IRS

December 5, 2012
Written by: Fresh Start Tax

Mike Sullivan

We are a professional tax firm that specializes in IRS tax issues and tax problems.

We have over 205 years of professional tax experience and over 60 years working directly for the internal Revenue Service.

If you have any questions regarding a IRS Tax Audit call us for a no cost professional tax consultation and speak directly to a tax professional.

There are several types of IRS tax audits.

1. Mismatches.

The most common type of IRS tax audit is the mail correspondence audit. IRS audits about 1.5 million taxpayers through mail correspondence. These usually occur as a result of 1099 and W-2 mismatches. The IRS collects billions of dollars a year on this type of tax audit.

Taxpayers should be aware that IRS matches up W-2’s and 1099 on each 1040. The CADE 2 computer system systemically does this.

2. DIF Scores.

The high DIF score is the second most common way IRS audits tax returns. The DIF score or the discriminatory index function score tax audit means your tax return fell out of the National Standards for various credits, expenses or something did not make sense on your tax return. Each tax return that registers a high DIF score is reviewed by a tax examiner for IRS audit potential.

The computer will self generate these scores and tax audits.

3. Random sample audit.

You won the IRS lottery and IRS will use your tax audit results to set up future DIF scores. A random sample audit means that the IRS will audit your whole tax return. THIS IS BAD NEWS.

4. National Program Audit.

IRS runs market specialization program in different areas in the country for different industries. IRS tries to audit all industries to set National Standards.

6. The Office Audit.

You will get a letter to appear in a local IRS office where a local office auditor will audit selected features of your tax return. These are small and quick tax audits. Many times IRS will audit up to 5 items om your tax return.

7. The Field Audit.

A more high skilled IRS Revenue Agent will spend days combing through your records. These are more advanced and complicated tax audits conduct at your home, place of business of at your representatives office. Many times these audits can last up to 40 hours.

If you have simple issues and you have nothing to worry about we recommend you handle the IRS tax audit yourself. If you have any skeletons in the closet make sure you are represented.

8. Referral audits. ( Collection Division )

As the IRS is completing a collection investigation the Revenue Officer will spot issues that will call for a closer look because of possible audit potential. Be friendly to the IRS agent.

9. Machine Generated IRS Audit.

This is a new type of tax audit whereas the IRS Cade 2 system  pulls the return for a tax audit.

 IRS TAX AUDITS – DIFFERENT TYPE OF IRS TAX AUDITS – TAX AUDIT DEFENSE – FORMER IRS

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