Got an IRS Audit Letter? Here's What Happens Next

Few envelopes cause more stress than one from the IRS that says "examination." When a client forwards me one, the first thing I tell them is that an audit isn't an accusation. Most audits are routine checks on one or two items, and many are handled entirely by mail.

First, figure out what kind of letter it is

Not every IRS letter is an audit. A balance-due notice or a CP2000 (a proposed change based on income the IRS has on file) works differently. A true audit letter will say which tax year is under review, what items the IRS wants to see, and how to respond: by mail, at an IRS office, or at your home or business.

Respond by the deadline

The letter will give you a date. Missing it is the most common way a small audit turns into a big bill, because the IRS can close the case with its own numbers. If you need more time to gather records, you can usually ask for an extension. Just ask before the deadline, not after.

Send only what they asked for

Gather the documents tied to the items listed: receipts, bank statements, mileage logs, 1099s. Organize them, label them, and answer exactly what was asked. Volunteering extra paperwork rarely helps and can open new questions.

You don't have to talk to the IRS yourself

You have the right to be represented. With a signed Form 2848, a CPA can deal with the IRS on your behalf, respond to requests, and attend meetings. Many people find that alone takes most of the stress away.

How far back can the IRS go?

In most cases, three years from when you filed. It can be six years if a large amount of income was left off, and there's no limit for a return that was never filed or for fraud.

When to call for help

If the audit covers business income, large deductions, or more than one year, or if you're not sure your records hold up, get IRS audit help before you respond. As a CPA and Certified Fraud Examiner in Northeast Ohio, I represent individuals and business owners through IRS audits and help them answer the IRS clearly and on time.

Got an audit letter? Contact me for a review before your deadline.

This post is general information, not advice for your specific situation.