I know of 2 local lco's that have been audited by the IRS. Both were cheating but had there paperwork in order and made out ok. One of these companies I used to be a foreman and this guy was as crooked as can be. My question is: 1) what exactly happens in a irs audit? 2) how is it decided that your business is to be audited? 3) how to prepare in case your business is audited?