What to Do If the IRS Audits You

Audit odds in context

For tax year 2021 returns, the IRS audited roughly 0.4% of individual returns overall. Odds rise sharply for very high income, very low income claiming EITC, and self-employed Schedule C filers.

The three audit types

1. Correspondence audit — letter mailing asking for documentation on specific items. By far the most common.
2. Office audit — in-person at a local IRS office. Broader scope.
3. Field audit — IRS agent visits your home or business. Most thorough; usually high-income or business returns.

First, verify it's real

The IRS initiates audits by mail only. Phone calls and emails demanding action are scams. Verify by calling the IRS at the published number on IRS.gov — never the number printed in the letter you received.

Read the notice carefully

• What tax year is being examined?
• What specific items or amounts are in question?
• What documents are requested?
• What's the response deadline (typically 30 days)?

Your rights as a taxpayer

• Right to professional representation (CPA, EA, or attorney)
• Right to know why information is being requested
• Right to appeal disagreements
• Right to confidentiality
• Right to retain copies of all submitted documents

How to respond well

1. Don't ignore it — penalties and assessments grow without response
2. Send only what was requested, nothing more
3. Provide clear, organized copies (never originals)
4. Use certified mail with return receipt
5. Keep a complete copy of everything you send

When to bring in a pro

• Field audit (always)
• Office audit involving multiple years or large dollars
• Correspondence audit you can't fully document
• Anything alleging fraud or criminal exposure

After the audit

Three outcomes: no change, additional tax owed (with interest and possibly penalties), or refund. You have 30 days to appeal disagreements to the IRS Office of Appeals, and 90 days to petition Tax Court if you still disagree.