Types of IRS Audits
Correspondence Audit
75%
Conducted entirely by mail for specific items on your return
Complexity:Low
Duration:3-6 months
Representation: Optional but recommended
Office Audit
20%
In-person meeting at local IRS office to review specific issues
Complexity:Medium
Duration:6-12 months
Representation: Highly recommended
Field Audit
5%
Comprehensive examination at your home, business, or representative's office
Complexity:High
Duration:12-24 months
Representation: Essential
Your Taxpayer Rights During an Audit
Representation Rights
- Right to professional representation by an attorney, CPA, or enrolled agent
- Right to have your representative present during all meetings
- Right to authorize your representative to speak for you
- Right to stop the interview to consult with your representative
Information Rights
- Right to know why the IRS is examining your return
- Right to know what documents and information the IRS needs
- Right to know how long the audit should take
- Right to appeal the audit findings
The Audit Process
1
Audit Notice Received
Day 1
You receive an audit notice specifying which items on your return are being examined.
Key Actions:
- Don't panic
- Read the notice carefully
- Contact a tax professional
- Gather requested documents
2
Prepare Documentation
30-60 days
Collect and organize all documents and records related to the items being audited.
Key Actions:
- Gather receipts and records
- Organize by tax year and category
- Make copies of everything
- Prepare explanations for questionable items
3
Initial Response
30 days from notice
Respond to the audit notice by the deadline, either by mail or scheduling an appointment.
Key Actions:
- Respond by deadline
- Submit requested documents
- Schedule appointment if required
- Consider professional representation
4
Examination Phase
3-24 months
The IRS examines your documentation and may ask follow-up questions or request additional information.
Key Actions:
- Provide only requested information
- Answer questions honestly
- Keep detailed records
- Work with your representative
5
Audit Results
30 days after completion
The IRS issues their findings, which may result in no change, additional tax owed, or a refund.
Key Actions:
- Review findings carefully
- Consider agreement or appeal
- Pay additional tax if owed
- Request payment plan if needed
Why You Need Professional Audit Defense
Benefits of Representation
- Professional knows audit procedures and taxpayer rights
- Can handle all communication with the IRS
- Helps minimize additional taxes and penalties
- Reduces stress and saves time
- Can negotiate settlements and payment plans
Risks of Going Alone
- May inadvertently provide damaging information
- Unfamiliar with audit procedures and rights
- Higher likelihood of additional taxes assessed
- Emotional stress can lead to poor decisions
- May miss opportunities for favorable resolution
Time is Critical
Act Quickly Because:
- • Audit notices have strict response deadlines
- • Delays can result in default assessments
- • Early professional help improves outcomes
- • Proper preparation takes time
- • Missing deadlines limits your options
Don't Wait If:
- • You received an audit notice
- • The audit involves complex issues
- • Significant money is at stake
- • You're unsure about your records
- • You feel overwhelmed by the process