The moment you open an IRS audit notice, one instinct kicks in: panic. Resist it. Most audits are correspondence audits — resolved entirely by mail, focused on one or two items, and closed without any additional tax owed when handled correctly. Here is exactly what to do, step by step.
Step 1: Read the notice carefully — all of it
Before you do anything else, read the entire notice. Identify:
- What type of audit it is (correspondence, office, or field)
- Which tax year(s) are under examination
- Exactly which items are being questioned
- The response deadline
- The specific information or documents requested
Many people panic at the word “audit” and miss the crucial detail that the IRS is only asking about one specific deduction — not their entire return.
Step 2: Do not respond immediately
Unless the deadline is imminent, take a few days to gather your records and think clearly before responding. A hasty, incomplete response is worse than a thorough, slightly delayed one. That said — never miss the deadline entirely.
Deadlines are hard
IRS audit deadlines are not suggestions. Missing a response deadline can result in the IRS automatically assessing the proposed changes — meaning you owe what they said you owe, with no further right to dispute it at that level. If you need more time, call the number on the notice and request an extension before the deadline passes.
Step 3: Gather every relevant document
Pull everything related to the items under examination:
- Original tax return and all schedules
- All W-2s, 1099s, and income documents for that year
- Receipts, bank statements, and credit card records supporting deductions
- Mileage logs, home office calculations, or other specific records
- Any prior IRS correspondence about this return
Organize everything chronologically and by category. Presenting organized documentation to the IRS signals credibility and makes the examiner’s job easier — which works in your favor.
Step 4: Understand the scope — and stay within it
This is critical: only provide what is requested. A correspondence audit asking about your charitable deductions is not an invitation to send your entire financial history. Volunteering additional information can expand the audit scope to issues the IRS wasn’t originally examining.
The scope trap
An examiner who receives more information than requested may feel obligated to review it. If that extra information raises new questions, the audit expands. Answer what is asked. Nothing more.
Step 5: Decide whether to get professional representation
For a simple correspondence audit involving a single clear-cut issue — a missing 1099, a math error — you can often handle it yourself. Get professional help if:
- The audit is an office or field audit
- Multiple years or large amounts are involved
- The issues are complex (business income, rental properties, international)
- You’re not confident in your documentation
- The IRS is questioning the legitimacy of a significant deduction
An enrolled agent, CPA, or tax attorney can represent you before the IRS — meaning they communicate with the examiner directly, and you don’t have to. You have the right to this representation at any point during the audit.
Step 6: Write your response clearly
For correspondence audits, your written response should:
- Reference the notice number and tax year at the top
- State clearly whether you agree, partially agree, or disagree
- Provide a specific explanation for each disputed item
- Attach supporting documentation with a clear index
- Send via certified mail with return receipt so you have proof of delivery
Step 7: Follow up if you don’t hear back
The IRS can take 60-90 days to respond to audit correspondence. If you don’t hear back within that window, follow up by calling the number on the original notice. Keep records of every call, including date, time, and the name of any IRS employee you spoke with.
What “closing” an audit looks like
An audit closes in one of three ways:
- No change: The IRS accepts your documentation and closes the case with no additional tax. This is the best outcome and more common than people expect when documentation is solid.
- Agreed: You and the IRS agree on a proposed change — you owe some additional tax, pay it, and the case closes.
- Disagreed: You dispute the IRS’s findings. This triggers the appeals process.