There are 3 types of audits by the IRS: Correspondence Examinations, Office Examinations, and Field Examinations. The level of complexity is in that order. The purpose for all these audits is to obtain a clear, explanation and also to provide backup documents to substantiate the claims on the tax returns.

A Correspondence Examinations audit is a short audit that consists of the IRS sending a letter to the taxpayer to request backup documents to support a figure on the tax return.

An Office Examinations audit is a bit more complex than a Correspondence Examinations audit. This type of audit is typically for small businesses, sole proprietorships, and high-income individuals. The audit will be held at an IRS local office. Besides the taxpayer, the tax preparers and lawyers are also in attendance to help answer questions from the IRS officials on behalf of the taxpayer.

In a Field Examination audit, the IRS pays a visit to the location of the business, where back-up documents can be easily accessed. This type of audit is for corporations mostly, and small businesses. It is the most complex of the three types of audits. It covers more areas of the business, and it can take several years to complete.

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