The Internal Revenue Service reviews individual and business tax returns, making decisions on which returns need auditing. This involves one of three different types of audits where an IRS agent will discuss the tax return with the tax filer.
Tax audits are correspondence, field or face-to-face, according to Darrin T. Mish, a tax attorney. Correspondence is typically a letter indicating the filer must pay more taxes, a field audit results in a visit from an IRS agent and a face-to-face audit requires the taxpayer to visit the IRS office for a discussion.
The chances of getting an IRS tax audit increase as reported income increases, according to World Wide Web Tax,. Additionally, large amounts of itemized deductions, shelter investment losses, high amounts of business expenses, prior tax audits and complex tax transactions with little back are a few common reasons for triggering an audit.
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The IRS reports audit information for tax returns over $100,000. In 2007, IRS audits for individual tax returns totaled 293,188. IRS audits with income over $200,000 were 113,105, with total individual tax audits in 2007 totaling 1,384,563 tax returns.