These examinations can take various forms, and it typically depends upon the taxpayer and the complexity of one’s tax return. One form is the campus examination, which is basically a paper correspondence, or phone conference, with the IRS addressing rather straightforward matters, for example, how the taxpayer substantiated a certain deduction. The IRS will ask the taxpayer to document items its questions on the tax return. If the taxpayer cannot produce those documents, then the IRS may disallow the relevant deduction.

There are also “area office examinations,” which are more typical when a small business is in view. They are conducted either by correspondence, an office interview, or a field examination. In a “field examination,” the revenue agent examines the taxpayer’s books and records at his or her place of business. One difference between a field exam and a campus exam (and an area office exam) is the IRS agent is more highly trained than an “office auditor” and therefore conducts a more thorough examination.

Please see other areas of this website for a discussion of the consequences of the involvement by the IRS’ Criminal Division