A tax auditor is a financial professional who specializes in taxes and evaluates financial records to determine whether they comply with applicable laws and regulations. Tax auditors, applying accounting principles, examine companies, individuals, institutions and organizations for compliance with federal, state and local tax laws.
A tax auditor's responsibilities include conducting internal audits to ensure compliance with tax regulations, analyzing and evaluating accounting systems and tax control units to reduce taxes, maintaining required tax documentation, assisting companies with tax returns and preparing tax audit reports.
Tax auditors are classified as internal, external or government auditors. Internal auditors are hired to conduct audits of companies and help identify fraud, tax errors and mismanagement of funds. External auditors are impartial third parties who help clients file tax forms. Government auditors are hired by the Internal Revenue Service (IRS) to conduct random audits of companies, especially those suspected of tax fraud or evasion.
[Last updated in September of 2021 by the Wex Definitions Team]