01
Correspondence audit
Conducted by mail. Typically targets a single item (charitable deductions, EITC, Schedule C expenses). Response is documentation; no in-person meeting. Most common audit type.
Audit & Compliance
IRS Audit Procedure
IRS examinations come in three flavors, each with distinct scope, timelines, and risk. Knowing which type you're in tells you how to respond.
Checklist Summary
An at-a-glance view of every step covered in this guide.
- Step 1: Confirm audit type from the opening letter (566, 2205-A, 3572).
- Step 2: File Form 2848 so the auditor works through the representative.
- Step 3: Produce only the years/items in the IDR; document with source materials.
- Step 4: Contest the RAR (Form 4549) via 30-day letter → Appeals if needed.
Key Forms & Notices
- Form 4549 (RAR)
- Form 870 (waiver)
- Form 872 (statute extension)
Statutes & Authority
- IRC §6501 (3-year statute)
- IRC §7602 (examination authority)
Timeline Summary
Jump to any stage
02
Office audit
At an IRS office with a Tax Compliance Officer. Broader scope than correspondence. Bring only what is requested; do not volunteer additional years or issues.
03
Field audit
Conducted at the taxpayer's business or representative's office by a Revenue Agent. Highest-risk. Full books-and-records review with lifestyle indirect methods available.
How the Procedure Works
- 1Confirm audit type from the opening letter (566, 2205-A, 3572).
- 2File Form 2848 so the auditor works through the representative.
- 3Produce only the years/items in the IDR; document with source materials.
- 4Contest the RAR (Form 4549) via 30-day letter → Appeals if needed.
Frequently Asked Questions
How far back can the IRS audit?
3 years generally, 6 years if 25%+ of gross income is omitted, unlimited for fraud or unfiled returns.
Should I sign Form 872 to extend the statute?
Only after weighing the trade-off. Extending preserves your ability to negotiate at Appeals; refusing forces the IRS to issue a Statutory Notice of Deficiency, which is not always worse.
Can I appeal audit results?
Yes. After the 30-day letter with Form 4549, file a written protest to Appeals within 30 days. If you skip the protest, the IRS issues a Statutory Notice of Deficiency and Tax Court is your only forum.
What triggers an audit?
DIF scoring anomalies, information-return mismatches, Schedule C loss patterns, cash-intensive businesses, high charitable contributions relative to AGI, and related-party transactions are the most common triggers.
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