DEFINITION of 'Office Audit'

In an office audit, a representative from the Internal Revenue Service (IRS) interviews the taxpayer and inspects the taxpayer's records in-person, usually at an IRS office. The purpose of an office audit is to make sure the taxpayer is accurately reporting income and deductions and paying the lawful amount of tax. These audits often only cover a few specific issues identified by the IRS in a written notice to the taxpayer. This notice also identifies which records the audit will review.

BREAKING DOWN 'Office Audit'

The IRS may select a tax return for an office audit at random as part of routine compliance efforts. A tax return may also be selected because of suspected errors based on mismatched documents or the examination of related taxpayers' returns. IRS Publication 556 provides details on examination and audit procedures.

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