IRS computers generate letters when they catch discrepancies between what you reported on your return and the W-2 and 1099 forms filed by people who paid you money during the year. Technically, those are not audits, in part because audits require taxpayers to produce documents. They look behind the numbers on a tax return, attempting to verify whether the deductions and credits claimed are legitimate or whether there is unreported income. But they can be a hassle for self-employed people who have more complex tax issues that sometimes are easier to resolve in person. Office and field audits involve meetings between an IRS worker and the taxpayer or the taxpayer's representative, usually a certified public accountant or enrolled agent.
Most accountants say they prefer to handle audits without their clients around.
When people are questioned on things they tend to be defensive. He said if the taxpayer is in the room, the auditor can ask questions directly, making it easy to expand the scope of the audit. Nervous taxpayers also have been known to blurt out information the IRS never requested. An office audit starts with a mailed notice directing you or your representative to appear at a particular time and place with your records. You can reschedule it and you can show up without all that information.