IRS Audit.
In plain English
An IRS audit is an examination of a tax return to confirm the numbers are correct and supported by your records. Most audits are not the dramatic in-person event people imagine. The majority are handled entirely by mail, where the IRS asks you to send documents for one or two items. Returns can be selected by a computer scoring system, by a mismatch with forms the IRS already has, or at random, and being selected does not mean you did anything wrong. The IRS generally has three years from the filing date to start an audit, though that window stretches longer in cases of large underreporting.
01Why it matters
An audit asks you to prove what you claimed, so keeping receipts and records for at least three years is the difference between a quick resolution and owing extra tax, interest, and penalties.
02The math, step by step
You claimed $4,000 in business travel. The IRS sends a letter asking for proof. You mail copies of your hotel bills, mileage log, and flight receipts. The numbers match what you reported, the IRS closes the audit with no change, and you owe nothing extra.
03What this is NOT
An audit is a verification, not an accusation. Many audits end with no change or even a refund. It only becomes a fraud matter if the IRS finds you deliberately hid income, which is rare and separate from a routine review.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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