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What is an Office Audit?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 14 August 2019
  • Copyright Protected:
    2003-2019
    Conjecture Corporation
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An office audit is a type of financial accounting meeting that normally takes place at a local branch office of a state or national revenue agency. The purpose of the audit is to work with a taxpayer to resolve what appears to be some minor question regarding documents submitted as part of a tax return. The idea is to provide the taxpayer with the opportunity to go over the issue with a qualified tax agent and come to some type of mutual determination regarding what further action, if any, is required to settle the matter.

A tax agency may call for an office audit whenever there is some aspect of a tax return that does not seem to be fully explained or accounted for. For example, if the income reported by the taxpayer is different from the wages and salary reported by an employer, this might be grounds for meeting with the taxpayer to determine the origin of the discrepancy. At other times, there may be some question regarding a specific deduction, making it necessary to explore that deduction in more detail before either approving or denying that deduction.

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Preparing for an office audit involves assembling all relevant documents associated with the tax period and return under consideration. In the United States, the Internal Revenue Service (IRS) provides a simple checklist that taxpayers can use to aid in gathering essential documents for this type of audit. Among the items on the list are the 1040 form used for the tax period, any records of payments forwarded to the agency, and documentation on all sources of taxable income. In most other nations, national and local revenue agencies also provide taxpayers with instructions on what type of documents and records to assemble and bring to the office audit, making it easier to quickly resolve whatever issue led to the audit request in the first place.

While the idea of being called for an office audit can be somewhat intimidating, it is important to not interpret the meeting as being evidence that the tax agency believes the taxpayer deliberately falsified tax returns or documents in some manner. In many situations, the purpose is to obtain some clarification on a deduction or the amount of income reported from a given source, or even some question regarding how the income tax was calculated. Taxpayers sometimes even find they have made some sort of minor error that led to paying more taxes than required, which in turn leads to a the issuance of a refund.

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