What does the IRS mean by “audit” of a tax return?

The term "audit" as used by the IRS refers to a thorough examination of financial information for accuracy. This process involves reviewing various aspects of a taxpayer's return to ensure that the information reported is correct, complete, and compliant with tax laws. Audits can include examining documents such as receipts, bank statements, and other financial records that support the items reported on a tax return. The purpose of the audit is to verify the legitimacy of claims made on the return and to determine whether the correct amount of tax has been paid.

While options like a "friendly review of tax filings" might suggest a casual assessment, an audit is much more formal and structured, focusing on compliance and accuracy. The other choices, such as a "routine check for compliance among all taxpayers" or "a verification process for dependents claimed," do not adequately capture the comprehensive nature of an audit, which can involve a range of financial documents and issues beyond just reviewing dependents or conducting a general compliance check.