Related examination

This means: If the IRS audits one of your customers or suppliers, and asks questions about your tax returns, you might be next in line for scrutiny.

The IRS may be conducting an unrelated audit that turns up information which is then matched to you. For instance, income from an unrelated party issued with Form 1099 may lead the IRS to examine the receiving taxpayer to determine if the income was properly reported. Alternatively, examination adjustments to one taxpayer may lead to an examination of a different taxpayer on the other end of a related transaction.