Question

Which of the following is true about the IRS audit process?

A. A TP who disagrees with an IRS auditor's finding can only get relief in court

B. Self employed TP's are less likely to be audited than employed taxpayers

C. Most taxpayer audits involve "special" agents

D. Less important issues are handled by means of a correspondence audit

Answer 1

Solution

Option (D) is correct

Less important issues are handled by means of a correspondence audit

There are many other important cases which are handled by high skill auditors which involves fraudulents and are more complicated and serious so Less important issues are handled by means of a correspondence audit

In case of option (A) TP would apply to Appeal division in the IRS. In an option (B) self employed are more flexible in manipulating their financial statements. In an option (C) special agents are applied in the cases of manipulation of financial statements and when frauds might be involved.