IRS Audits Explained for Columbus, NE Taxpayers

An IRS audit is a review of a tax return and the records supporting it. An audit does not automatically mean someone did something wrong; the IRS may select returns through computer screening, random statistical sampling, or connections to another taxpayer’s return. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits?utm_source=openai))

For residents of Columbus, NE, the most useful first step is to understand what the IRS letter says, what information is requested, and which deadlines apply.

What is an IRS audit?

An audit is the IRS’s process for checking whether income, deductions, credits, expenses, and other tax-return details are accurate under federal tax law. The review may concern only one item, such as a dependent or charitable contribution, or several parts of a return.

Being selected does not necessarily mean the IRS believes the entire return is inaccurate. A question about one deduction may remain limited to that issue unless the examination reveals a reason to expand its scope.

A refund also does not automatically trigger an audit. The IRS uses several selection methods, and filing an amended return does not remove the original return from consideration. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits?utm_source=openai))

How will the IRS notify you?

The IRS begins an audit by mail. It does not initiate an audit by telephone. A legitimate notice should identify the tax year, the items under review, the documents requested, where to send them, and the response deadline. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits?utm_source=openai))

Read every page of the notice, including any reply cover sheet. Confirm that the tax year and taxpayer information are correct. Residents who recently moved, changed mailing addresses, or experienced delivery problems should take extra care because missing the first letter can make later deadlines harder to manage.

An unexpected phone call, text message, email, or social-media message demanding immediate payment is not the normal way an audit begins. Use contact information in the mailed IRS notice rather than relying on information provided by an unsolicited caller.

What types of audits are common?

Most individual audits fall into one of three general categories:

• Correspondence audit: The IRS asks for documents by mail or through an approved electronic submission process. This is common when the review concerns a specific deduction, credit, income item, or calculation.
• Office audit: The taxpayer meets with an IRS examiner at an IRS office and brings the requested records.
• Field audit: An examiner conducts a more detailed review at a taxpayer’s home, business, or authorized representative’s office.

The notice should explain which type applies and how the meeting or document submission will work. If a mail audit involves more records than can reasonably be sent, the IRS may provide instructions for arranging a face-to-face review. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits?utm_source=openai))

What records should be gathered?

The IRS generally asks for records that support the specific items listed in the notice. Useful documents may include:

• W-2 and 1099 forms
• Bank and brokerage statements
• Receipts and canceled checks
• Mortgage interest and property-tax statements
• Medical expense records
• Donation acknowledgments
• Child-care or education records
• Mileage logs and business expense documentation
• Rental-property income and expense records
• Dependent-care or household records

The records should show both the amount and the reason the expense or credit was reported. For example, a credit-card statement may show that a purchase occurred, but a receipt or business record may be needed to explain its tax purpose.

The IRS says taxpayers generally must keep the records used to prepare a return for at least three years from the date the return was filed. Longer retention may be appropriate for property, investments, business assets, or situations involving unfiled or fraudulent returns. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits?utm_source=openai))

Send copies rather than originals unless the IRS specifically instructs otherwise. Keep a complete copy of everything submitted, including the notice, cover sheet, correspondence, and proof of delivery.

What if a deadline is difficult to meet?

Do not ignore the letter. If more time is needed, follow the extension instructions in the notice and make the request before the deadline.
For many correspondence audits, the IRS may ordinarily grant a one-time automatic 30-day extension when properly requested. A Notice of Deficiency is different: the IRS generally cannot extend the deadline for petitioning the U.S. Tax Court, which is commonly 90 days from the date on the notice. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits?utm_source=openai))
A request for more time does not necessarily stop interest from accruing on an eventual balance. It also does not replace the need to provide a complete response.

What happens during the examination?

The examiner reviews the documents and may ask follow-up questions. The review can end with no change, with an agreed adjustment, or with proposed changes that the taxpayer disputes.
If the IRS does not receive a response by the date shown in the notice, it may complete the examination using the information available and issue an audit report with proposed changes. ([irs.gov](https://www.irs.gov/businesses/small-businesses-self-employed/irs-audits?utm_source=openai))
A practical response should address each requested item separately. If a document is unavailable, explain what happened and provide substitute evidence when possible. Avoid sending unrelated records that make the file harder to understand.

What are the possible results?

An audit may result in:

• No change: The IRS accepts the reported items.
• Agreed changes: The taxpayer accepts proposed adjustments and signs the required forms or pays the resulting amount.
• Disagreed changes: The taxpayer provides an explanation, requests further review, or uses available appeal rights.

A proposed adjustment is not always the final amount owed. Review the report carefully to distinguish tax, penalties, and interest, and check whether the IRS correctly understood the facts.
Taxpayers have rights to clear explanations, privacy, confidentiality, representation, a fair hearing, and the ability to challenge the IRS’s position. They also have the right to know when an audit is finished and the general limits on how long the IRS has to assess additional tax. ([irs.gov](https://www.irs.gov/taxpayer-bill-of-rights?utm_source=openai))

What if you disagree with the IRS?

Disagreement should be stated in writing and supported with specific facts and documents. A general statement that the IRS is wrong is less useful than explaining which adjustment is disputed and why.
Many taxpayers can request review by the IRS Independent Office of Appeals. For eligible smaller cases, Form 12203 may be used when the total proposed additional tax and penalties for each tax period are $25,000 or less. The notice will contain the relevant instructions and deadlines. ([irs.gov](https://www.irs.gov/independent-office-of-appeals?utm_source=openai))
If an assessment remains unpaid and new information was not previously considered, audit reconsideration may also be available. This can apply when a taxpayer missed the original audit, moved and did not receive the correspondence, or later found records supporting the return. ([irs.gov](https://www.irs.gov/credits-deductions/audit-reconsideration-process-for-correspondence-examination-audits-by-mail?utm_source=openai))

The most serious mistake is allowing a deadline to pass without taking action. Keep the notice, organize the records by issue, document every submission, and use the IRS instructions tied to that specific case.