A tax audit is an examination of an individual or entity’s tax return by the Internal Revenue Service (IRS) or other tax authorities to verify that the information reported on the return is accurate and complete.

Tax audits may be conducted randomly, or they may be triggered by specific red flags or anomalies on a tax return. During a tax audit, the IRS may request additional documentation or information to support the items reported on the return, and may also review the taxpayer’s financial records and other related information.

If the IRS identifies discrepancies or errors on the return, they may assess additional taxes, penalties, and interest. However, taxpayers have the right to appeal the findings of a tax audit and may be able to negotiate a settlement or payment plan with the IRS.

Tax professionals can provide guidance on how to prepare for a tax audit and how to respond to any inquiries or requests from the IRS.