You’re now almost four times as likely to conduct your tax audit by mail, as you are to sit down with the tax man.

  • More than 1.6 million Americans who were slapped with audits last year,
  • 78% dealt with correspondence audits,
  • 22% were asked to come in for an in-person examination

That is a 13% rise in audits-by-mail from 2009, and a 93% jump compared to 2003. In 2000, the chances of getting a correspondence audit were less than 2 to  [CNN Money, April 5, 2011].

“When people think of audits, they think of being in an office and going to war with someone from the IRS,” said Thomas Cooke, a professor of accounting and business law at Georgetown University. “Years ago you could almost guarantee you would have to go in and see someone to do it, but this isn’t the case anymore.”

While a face-to-face examination with an IRS agent can involve going through an entire return, correspondence audits usually ask taxpayers to provide information about very specific items on a tax return, like income, expenses or deductions.

Maybe you’re thinking “Why me? I pay my taxes. If I owe more, I’ll just pay it.” But did you think about the penalties and interest you’ll also owe? Did you think about what else the IRS may be looking at? Are you wondering if the IRS will be looking at you next year? Did you consider if you owe more for last year, what about the year before?¬†While these are all reasonable questions have you considered the implications an IRS letter can have?

While many taxpayers can simply read the IRS letter and respond appropriately, you may also consider having a different tax professional review your tax return and records and see what other exposures or mistakes you may have. If you made a mistake last year, what other mistakes could you have made? Do you really want to repeat the same problem next year? Who knows – maybe you’ll get lucky and there are other deductions you should have taken and didn’t.

Throwing a few extra dollars at an independent review and having a professional represent you would at least give you the peace of mind that you reported everything correctly and you’re being represented by a tax professional, experienced in IRS representation and negotiation.

Ignoring, or not responding to the IRS letters is not an option. Correspondence audits carry equal weight to the earlier face-to-face examinations.