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Simple English definitions for legal terms
correspondence audit
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A quick definition of correspondence audit:
A correspondence audit is when the IRS audits a taxpayer's return through mail or telephone. This means that the IRS will ask the taxpayer to provide additional information or documentation to support their tax return. It is important for taxpayers to respond promptly and accurately to correspondence audits to avoid penalties or further audits.
A more thorough explanation:
A correspondence audit is a type of audit conducted by the Internal Revenue Service (IRS) of a taxpayer's return through mail or telephone. The IRS will request additional information or clarification on certain items on the tax return through written correspondence or phone calls.
For example, if a taxpayer claims a deduction for charitable donations, the IRS may request documentation such as receipts or cancelled checks to verify the deduction. The taxpayer can respond to the request by mail or phone, and the IRS will review the information provided to determine if the deduction is valid.
Correspondence audits are less invasive than other types of audits, such as field audits, which are conducted in person at the taxpayer's business premises or lawyer's offices. However, it is still important for taxpayers to respond promptly and accurately to the IRS's requests for information to avoid potential penalties or further scrutiny.