What is the difference between a tax assessment and a tax audit?

@juston 

A tax assessment and a tax audit are two different processes related to taxation, but they serve distinct purposes.

1. Tax Assessment: A tax assessment is a process used by tax authorities to determine the tax liability of an individual or organization. It involves evaluating the tax return or other relevant information provided by the taxpayer to calculate the amount of taxes owed. The assessment may be done based on the income, deductions, credits, and other tax-related information provided by the taxpayer. The tax authority will issue an official notice (tax assessment) informing the taxpayer of the final tax liability. This notice is generally sent after the tax return has been filed.
2. Tax Audit: A tax audit, on the other hand, is a detailed examination or review of a taxpayer's financial records and activities by tax authorities. The primary purpose of a tax audit is to ensure compliance with tax laws, identify any discrepancies, and confirm the accuracy of reported information. Tax audits can be conducted randomly or based on specific risk factors that may indicate potential errors or fraud. Tax auditors have the authority to request additional documentation, interview the taxpayer, and perform on-site inspections. The objective is to verify the accuracy and completeness of the tax return and determine if any adjustments are necessary. Consequently, a tax audit can result in changes to the initially assessed tax liability.

In summary, a tax assessment is the initial determination of tax liability by tax authorities based on the information provided, while a tax audit is a more extensive review of financial records and activities to ensure compliance and accuracy.