A guide to preparing for and responding to an IRS audit, including organizing documentation, understanding your rights, and managing the audit process from start to finish.
Read the audit notice carefully and identify the type: correspondence, office, or field audit
Correspondence audits are the most common (about 75% of all audits) and are handled entirely by mail. Office audits require you to visit an IRS office. Field audits mean an IRS agent comes to your home or business — these are the most serious and usually involve higher incomes or business returns.
Note the specific items or issues the IRS wants to examine
The audit notice lists exactly what the IRS is questioning. It might say 'charitable contributions on Schedule A' or 'business income on Schedule C.' The IRS generally cannot expand the audit beyond the items listed unless they find something suspicious during the examination.
Check the response deadline and mark it on your calendar
Most audit notices give 30 days to respond. If you need more time, call the number on the notice and request an extension — the IRS usually grants 30-60 additional days. Never ignore an audit notice. Failing to respond means the IRS will assess additional tax based on their own calculations.
Verify the notice is legitimate and not a scam
The IRS always initiates audits by mail, never by phone, email, or text. A real notice comes on IRS letterhead with a specific notice number (like CP2000 or Letter 566). If unsure, call the IRS directly at 800-829-1040 to verify. Do not call phone numbers listed on suspicious letters.
Organize Your Documentation
Pull your filed tax return for the year under audit
If you can't find your copy, request a transcript from the IRS at irs.gov/individuals/get-transcript. A tax return transcript shows line items from your filed return. It's free and usually available within 5-10 business days by mail.
Gather receipts, invoices, and bank statements for every questioned item
The burden of proof is on you — the IRS doesn't have to prove you're wrong; you have to prove you're right. Organize documents by category matching the audit notice. A well-organized package often leads to a faster, more favorable outcome.
Prepare written explanations for unusual deductions or income fluctuations
If your charitable donations jumped from $2,000 to $15,000, prepare a one-paragraph explanation (e.g., 'Donated a vehicle worth $12,000, receipt attached'). Clear, brief explanations prevent the auditor from drawing negative inferences.
Create a spreadsheet summarizing the questioned items with supporting document references
An organized summary that says 'Charitable donations: $15,000 total — See Tabs A through F for 6 receipts' makes the auditor's job easier. Auditors who find organized records are less likely to dig further into other areas of your return.
Make copies of everything — never send originals to the IRS
The IRS can lose documents. Always send photocopies and keep your originals. If sending by mail, use certified mail with return receipt so you have proof the IRS received your documents. Save the tracking number.
Know Your Rights
Review IRS Publication 1 (Your Rights as a Taxpayer)
The Taxpayer Bill of Rights includes: the right to be informed, the right to quality service, the right to pay no more than the correct amount, the right to challenge the IRS position, and the right to appeal. The IRS must explain its decisions in writing.
Decide whether to represent yourself or hire a tax professional
For correspondence audits on simple issues, self-representation is usually fine. For office or field audits, a CPA, Enrolled Agent, or tax attorney can represent you without you being present (using Form 2848 Power of Attorney). Professional representation costs $1,000-$5,000+ but often saves more than it costs.
Understand you can request a different auditor or supervisor if treated unfairly
If you feel the auditor is being unreasonable, you can ask to speak with their manager. You can also contact the Taxpayer Advocate Service at 877-777-4778 if you're experiencing significant hardship or the audit isn't being handled properly.
Know the statute of limitations for the tax year under audit
The IRS generally has 3 years from the filing date to audit a return. This extends to 6 years if income was underreported by more than 25%. There's no time limit if fraud is involved or if no return was filed. The IRS may ask you to sign Form 872 to extend the deadline — you're not required to agree.
Respond to the Audit
For correspondence audits, send only the documents specifically requested
Don't volunteer extra information. If the IRS asks for charity receipts, send charity receipts — not your entire file. Extra documents give the auditor reasons to look at other areas of your return. Answer what's asked, nothing more.
For office or field audits, prepare your answers in advance
The auditor will ask questions about your return. Practice concise, truthful answers. Don't guess — say 'I'll check my records and get back to you' if unsure. Everything you say can be used to adjust your tax. Bring only documents related to the audit scope.
Keep detailed notes of every conversation and meeting with the IRS
Write down dates, times, the auditor's name and ID number, what was discussed, and what was requested. If a dispute arises later, your contemporaneous notes carry significant weight in appeals or court proceedings.
Respond by the deadline — request extensions if needed before the deadline passes
Missing a deadline is one of the worst things you can do. The IRS will proceed without your input and issue a notice of deficiency based on their calculations. Once that happens, you have only 90 days to petition Tax Court.
After the Audit
Review the audit results letter (30-day letter) carefully
The 30-day letter proposes changes to your return and gives you 30 days to agree or disagree. If you agree, sign the form and return it. Additional tax plus interest will be assessed. If you disagree, you can request an appeal.
If you disagree, file a written protest to request an Appeals hearing
For proposed adjustments over $25,000, you need a formal written protest explaining why you disagree with each adjustment. For amounts under $25,000, a brief letter requesting an appeal is sufficient. IRS Appeals is independent from the audit division and settles about 80% of cases.
If Appeals doesn't resolve it, consider petitioning the US Tax Court
You have 90 days from receiving a statutory notice of deficiency (90-day letter) to petition Tax Court. The filing fee is $60. Tax Court lets you dispute the IRS without paying the tax first. Missing the 90-day deadline means you must pay first and sue for a refund in District Court.
If you owe additional tax, set up a payment plan if needed
You can apply for an installment agreement online at irs.gov/payments if you owe $50,000 or less. Monthly payments can be spread over up to 72 months. The setup fee is $31 for direct debit or $130 for other methods. Interest continues to accrue on the unpaid balance.
Use the audit experience to improve your recordkeeping going forward
The IRS doesn't audit the same return twice (with rare exceptions for fraud). But they can audit other years. Fix whatever documentation gaps caused problems in this audit. Digital recordkeeping with cloud backup is the most reliable long-term approach.
Frequently Asked Questions
How likely am I to be audited by the IRS?
For individual returns, the overall audit rate is about 0.4% (roughly 1 in 250 returns). However, the rate increases significantly at higher incomes: taxpayers earning over $1 million face audit rates of 1-2%, and those earning over $10 million face rates above 8%. Returns with Schedule C income, large charitable deductions relative to income, earned income tax credit claims, and foreign account disclosures are also audited at higher rates.
How far back can the IRS audit my tax returns?
The standard statute of limitations is 3 years from the date you filed the return. If the IRS finds you underreported gross income by more than 25%, the window extends to 6 years. There is no statute of limitations for fraudulent returns or returns that were never filed. An audit notice received within the 3-year window can extend the process further — the IRS has time to complete the examination even if it stretches beyond the original 3 years. Tax laws change frequently — verify current rules with the IRS or a tax professional.
What types of IRS audits exist?
There are three types. A correspondence audit is the most common — the IRS mails a letter asking for documentation on specific items, and you respond by mail. An office audit requires you to bring records to a local IRS office for an in-person review. A field audit is the most thorough — an IRS agent visits your home or business to examine records on-site. About 75% of audits are correspondence audits. Field audits are reserved for complex returns, high-income taxpayers, and business returns.
Can I represent myself in an IRS audit?
Yes, you can represent yourself in any type of audit. For a simple correspondence audit about a single issue (like a missing 1099), self-representation is often sufficient. For office or field audits, professional representation from a CPA, enrolled agent, or tax attorney is strongly advised. Under IRS rules, you have the right to designate a representative using Form 2848 (Power of Attorney) and you do not need to attend the audit personally — your representative can handle everything on your behalf.
What happens if I disagree with the audit results?
You have 30 days after receiving the examination report to request a meeting with the auditor's supervisor. If that fails, you can file a formal protest with the IRS Office of Appeals — an independent division that resolves about 85% of cases without going to court. If the Appeals process fails, you can petition the US Tax Court within 90 days of receiving a Notice of Deficiency, or pay the tax and sue for a refund in federal district court or the Court of Federal Claims.