Preparing for your tax audit can make the process smoother and help ease some of the stress that can come with the process. The steps you should take to prepare depend in part on whether your audit will be conducted as a correspondence audit, an office audit, or a field audit.
Correspondence audits are conducted, as the name implies, without face-to-face interactions. The IRS will notify you that they need certain information and you must respond, providing them with the requested documents or answers to inquiries. Because of the relatively straightforward nature of this type of audit, preparing for it typically involves confirming your response adequately addresses the questions raised in the audit notice.
If your audit will instead be an office audit, conducted at a local IRS office, or a field audit, conducted at your place of business (or your tax professional’s or tax attorney’s office), your tax professional or lawyer can help you prepare by:
Reviewing the IRS letter and document request
Preparing copies of your tax returns for the time period(s) in question
Gathering relevant documentation including receipts for expenses and profit and loss statements
Verifying that the information provided to the IRS on your tax returns was reported and computed accurately