A "tax audit" occurs when a taxing agency examines a company or individual's tax returns to verify accuracy. The taxing agency usually begins by mailing a notice to the taxpayer letting them know they are being audited. The notice should specify the name of the taxpayer and the tax years subject to the audit. The burden of proof will be on the taxpayer to demonstrate the accuracy of the returns in question. Because the burden of proof is on the taxpayer, it is essential to maintain accurate records and keep all relevant receipts, invoices, and any other documentary proof of financial matters affecting the income tax liability.