Type Of Audits Or Examinations

In general, there are 4 types of audits:

  • Correspondence Audit: This is the most common audit. The IRS needs additional information from taxpayers.

  • Field Audit: In field audits an IRS agent will come to business or home to examine or audit records. 

 

  • Office Audit: Taxpayers have to go to an IRS office to meet with IRS agent. Office audits involve with more and complex details. 

  • Taxpayer Compliance Measurement Program: This audit works on randomly selected basis. In a TCMP audit, every line of the tax return is examined or audited and taxpayer have to provide documentation for all deductions.

The IRS Audit & Collection Process  

 

The IRS audit & collection process is a series of legal actions that the IRS can take to collect the taxes taxpayers owe. The Agency has a super, nearly unlimited power to do everything within its authorities to collect tax debts. Most State Taxing authorities have similar collection models.

Per IRS publication 594, when taxpayers' tax returns are under examination or audit and taxpayers do not respond timely to IRS letters or satisfy the IRS questions or demands or final tax payment deadlines have passed after, the IRS may proceed with some but not limited to following actions:

  • Tax Liens. The agency can claim legal liens against taxpayer's properties or assets such as homes, cars, bank accounts, business, retirement accounts, Social Security benefits, etc., The liens give the IRS ownership and control of taxpayer's assets. These liens go into all public records and adversely affect credit history of taxpayers.   

  • Tax Levies. When tax liens are in place, the IRS notifies taxpayers at least 30 days in advance to provide a last chance to taxpayers by law for requesting a final hearing to challenge IRS tax levies. After this 30-day period passes, the agency may proceed and seize the assets of taxpayers such as bank accounts, cars, homes, business, boats, properties, etc. and sell them until all debts are paid off. 

 

  • Wages Garnishment. The IRS may continue to tap into taxpayer's current and future income sources. They may take their shares out of taxpayer's paychecks with a significant amount at each payroll until taxes are paid off. They may leave taxpayers small amounts to take home just enough to cover basic living expenses.

With new Tax Cuts & Jobs Act, the IRS and State Taxing Authorities have stepped up their policies to enforce higher penalties and significant interest on top of the original tax debts. The debts are significant with higher interests and penalties like a running snowball. In some situations, after critical audit cases, some taxpayers' financial lives have been turned upside down.

Under Section § 7201, beside monetary collection, taxpayers may be charged of tax evasion. Tax evasion is willful attempts to hide or fail to report taxes accurately, or the failure to pay taxes. Tax evasion is a felony. If the IRS proves its case for tax evasion against a taxpayer, the penalties can be significant including monetary fines and jail time.

Logo 1.png
Contact Us

The CPA Corner, Inc.

Certified Public Accountant 

​​​​4000 Barranca Parkway, Suite 165, Irvine 92604

Office: (949) 387-4321

(Due To Coronavirus Pandemic, Our Office Is Closed

Temporarily. We Offer Online Services At This Time)   

  • Facebook App Icon
Government Links
    Members & Partners
AICPA.jpg

Our Clients are from Northern California - Southern California - Los Angeles County - Orange County - Riverside County - San Diego County - Pasadena - Glendale Santa Monica - Irvine - Fountain Valley - Laguna Niguel - Laguna Beach - Laguna Hills - Laguna Woods - Lake Forest - Dana Point - Newport Beach - Newport Coast - Mission Viejo - Costa Mesa - Anaheim - Anaheim Hills - Aliso Viejo - Huntington Beach - Fullerton - Garden Grove - Lake Forest - City of Orange - Seal Beach - Long Beach - Tustin - Westminster - San Clemente - Santa Ana - San Juan Capistrano - Rancho Santa Margarita - Coto De Caza - Brea - Yorba Linda - Buena Park - Cypress - La Palma Placentia - Anaheim Hills - Rancho Santa Margarita - Stanton - Oceanside - La Mirada - Cerritos - Baldwin Park - El Monte - Lakewood - Manhattan Beach - Fontana -Chino Hills - Ontario - Rancho Cucamonga - Lake Arrowhead - Redlands - Santa Barbara County - Other States 

Copyright © 2020 The CPA Corner, Inc. | 4000 Barranca Parkway, Suite 165, Irvine CA 92604 | Federally Registered With All Rights Reserved | Powered By The CPA Corner, Inc. | No Part Of This WebSite May Be Reproduced, Copied, Stored In Any Retrieval System Or Transmitted In Any Way, By Any Means Or By Any Method Without The Written Permission And Approval Of The CPA Corner, Inc. | No Solicitation In Any Online Forms Or Other Irrelevant Questions Or Request Are Allowed. Thank You!