What to Do If the IRS Audits You
Confirm the audit letter is genuine, read what the IRS is asking for, and note the response deadline. Most audits are done by mail and focus on specific items. Gather records that support those items and respond on time, or ask for more time. You have the right to professional representation and to appeal if you disagree. Never ignore an audit; the IRS can assess tax based on its own conclusions.
An audit is a review of your return to verify that income, deductions and credits were reported correctly. Most audits end with no change or a modest adjustment.
Step 1: Make sure it is real
The IRS initiates audits by mail, not by phone, email or text. Check the notice number and contact information against IRS.gov. See how to tell if an IRS letter is real.
Step 2: Understand the type of audit
- Correspondence audit: by mail, asking for documents on specific items
- Office audit: an interview at an IRS office
- Field audit: an agent visits your home or business, usually for business returns
The letter explains what is being reviewed (IRS).
Step 3: Gather records
Provide exactly what is requested, organized and labeled: receipts, bank statements, invoices, logs, contracts. Send copies, never originals. If you lack records, reconstruct them from bank records and third parties.
Step 4: Respond on time
Meet the deadline in the letter, or call to ask for an extension. Keep proof of what you sent and when.
Step 5: Know your rights
The Taxpayer Bill of Rights includes the rights to be informed, to quality service, to pay no more than the correct amount, to challenge the IRS's position, to appeal in an independent forum, to privacy and confidentiality, and to retain representation (IRS).
Representation
You can be represented by an attorney, certified public accountant or enrolled agent, who can communicate with the IRS for you with a power of attorney (Form 2848).
Possible outcomes
- No change
- Agreed: you accept the adjustments and pay or set up a payment plan
- Disagreed: you can request a conference with a manager, go to the IRS Independent Office of Appeals, or petition the US Tax Court after a notice of deficiency, usually within 90 days
How far back the IRS can go
Usually three years, but longer in some cases. See how far back the IRS can audit.
When to get a lawyer
If the audit involves potential fraud, unreported income, large amounts, or you are contacted by IRS Criminal Investigation, talk to a tax lawyer before saying more. Communications with a lawyer have stronger privilege protection.
Sources
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This article is general legal information, not legal advice, and reading it does not create an attorney-client relationship. Laws differ by state and change over time; talk to a licensed attorney in your state about your situation.