What Happens During an IRS Audit

An audit is a review of a tax return to check that income, deductions, and credits were reported accurately. Being audited doesn't mean the IRS thinks someone cheated — many audits are triggered by statistical outliers or random selection, not suspicion of wrongdoing.

The three types of audits

A correspondence audit is handled entirely by mail and is the most common — usually about a specific item, like a claimed deduction. An office audit requires an in-person meeting at an IRS office, typically covering a few specific issues. A field audit is the most extensive, with an IRS agent reviewing records in person, often at the taxpayer's home or business, and can cover the whole return.

What the IRS is actually checking

Auditors are verifying that reported numbers are supported by records: receipts, bank statements, mileage logs, and so on. The burden is on the taxpayer to substantiate what was claimed — the IRS doesn't have to prove a deduction was wrong, the taxpayer has to prove it was right. This is why recordkeeping matters more during an audit than almost any other part of the process.

Possible outcomes

An audit can end with no change if everything checks out, an agreed adjustment where the taxpayer accepts the IRS's proposed changes, or a disputed adjustment, which can be appealed within the IRS or, if that doesn't resolve it, taken to U.S. Tax Court. Most audits are resolved without ever reaching court. Responding promptly and organizing documentation before the first meeting tends to shorten the process significantly.