What is the difference between a correspondence audit and a field audit?

• A. A correspondence audit is conducted by mail with limited documentation; a field audit requires in-person examination at the taxpayer’s home/office or IRS office and typically involves more complex issues.
• B. A correspondence audit is in-person; a field audit is conducted by mail.
• C. A correspondence audit and a field audit are identical in process.
• D. A correspondence audit is for corporate tax only; field audit is for individuals.

Answer: (A)

A quick way to think about it is that one review type is done by mail and tends to handle simpler items, while the other is an on-site, in-person examination that tackles more complex issues.

A correspondence audit is conducted by mail. The taxpayer sends the IRS the documents requested, and the review focuses on a few items with limited documentation. It’s typically faster and used for straightforward questions or small-dollar adjustments.

A field audit requires an in-person examination, either at the taxpayer’s premises or at an IRS office. It usually involves more complex issues, larger dollar amounts, and a broader set of records and potential interviews. Because the examiner needs to see books, records, and operations firsthand, it often takes longer and can be more involved.

So, the key difference is the method (mail versus in-person) and the scope (limited, simple issues versus broader, more complex issues).