When a client gets an audit notice I review the return and the documents requested and almost always can determine what triggered the audit. The document request normally tells you what triggered the audit because mixed in with the boiler plate requests is often something that is not boiler plate.
When I represent a client in an audit I want to know what they are looking for before the come. When I know what they are looking for, I can be prepared. I hate surprises in audits. It is almost always obvious what they think they can get for an adjustment.
I then do a cost benefit analysis to discuss the process of handling the audit. For example, if they are after auto expenses and the benefit of the auto expense deduction is less than the cost of supporting it we may decide to rollover.
I understand the normal field audit process to be that first returns get scored for potential income. The scoring process is secret but its not hard to see what items on a return may be questionable, the nature of the business etc. The second step is more arbitrary. Someone is supposed to manually review the selected return and assign it. Sometimes I have seen some less productive audits get assigned simply to keep staff busy or to train the auditor on procedures.
Every agent I have asked regarding the reason for selection responds that they do not know.
This is my point.
The audit letter didn’t request anything. It was simply an audit of my complete return. Now, do you understand why I am suspicious?
The agent didn’t challenge anything. All he did was disappear into a conference room for a day with my documentation, and sent a letter a few days later saying that there was no change. I got a final determination letter about a month later.
I didn’t expect the agent examining my return to know. But, someone made that decision. If they can’t articulate a reason, then I should have never been audited. But, if I found out they selected me for inappropriate reasons, I would file a criminal complaint.