Certified IRS Audit Letters: What You Should Know

If the IRS sees red flags in your return or selects you randomly, you may receive an IRS audit letter. In this post, we’ll discuss how the IRS notifies taxpayers of audits, what an audit letter looks like, and what your next steps should be after receiving a notice.

IRS Certified Mail Audit Letters

The IRS always issues an audit via mail. The IRS will never notify you of an audit through a phone call or email.

Contact your local IRS office or a tax professional if you want to verify the legitimacy of an audit notice.

Know that a legitimate IRS audit letter will provide information – not ask for information. An IRS letter will typically include your name, address, and Social Security number. Read our tips on how to tell a fake IRS letter from a real one.

Sample Certified IRS Audit Letters: What to Look For

The IRS is clear and concise in its letters and notifications. An IRS audit letter is certified mail that will clearly identify your name, taxpayer ID, form number, employee ID number, and contact information. For example, the first line of text might say, “We have selected your (state or federal) income tax return for the year shown above for examination.” The IRS will also explain the primary focus of the meeting and what you need to provide in order to resolve it within four sections of the letter:

  • Why the information document request is important

    This section simply explains why it’s important to bring the documents that the IRS has requested.

  • What to expect in the examination

    The IRS will notify you how long your meeting will last (typically 3 hours) and explain their wish to complete the entire process in the time allotted – this is contingent on the documents you provide and whether or not you were selected for a non-correspondence audit.

  • Who may come to the examination

    If you filed a joint return, you and or your spouse may attend. You may also have someone represent you at the meeting; if you plan on not attending with your representative , a power of attorney form must be filed.

  • What will happen if you do not respond

    The IRS will issue a report showing additional tax due so it’s in your best interest to call and schedule an appointment as soon as possible.

Finally, the letter will be signed by the examination officer who has been assigned to your case and wrote your audit letter. An IRS letter (certified mail) will clearly tell you exactly what information they are looking for.

What To Do If You’ve Received A Certified IRS Audit Letter

Your actions before, during, and after your IRS audit will determine your compliance with the government.

Write An Audit Response Letter

Respond as soon as possible with either a phone call or an audit response letter – you will have 30 days to do so without a penalty. If you choose to write an audit response letter, here are some tips.

  • Include the following: Tax ID number, full name, contact information, employee ID, business ID (if applicable), and the name of the IRS officer who is in charge of your case.
  • Address each finding issue that the IRS stated in your audit letter.
  • Provide any and all related documentation attached to your letter.
  • Request a time and date to meet and resolve the finding issues.

The best thing to do when receiving an IRS audit letter is to contact a tax professional. A CPA or tax attorney will know exactly how to handle your unique circumstances and reasons for the audit. These response letters need to be flawless; if done correctly, they can resolve an audit quickly and stress-free.

If the IRS audit is questioning some of your income, expenses, or deductions, gather your receipts and bank account statements so you can argue your case.

The best thing to do when receiving an IRS audit letter (by certified mail) is to contact a tax professional. A CPA or tax attorney will know exactly how to handle your unique circumstances and reasons for the audit. 

How To Get Through An IRS Audit

If you do owe tax money to the IRS, a tax professional can usually help you negotiate an installment agreement so you can pay your taxes in small, affordable increments. It’s possible that the IRS may even forgive some of your debt. They know that it’s better to collect some money than no money at all. But you can only negotiate these solutions if you reply to your IRS audit letter as soon as possible and do everything that the letter requests. Failure to comply with IRS instructions may lead to severe financial penalties or tax liens.

Frequently Asked Questions

What Triggers An IRS Audit?

  • Failure to report income
  • A large number of itemized deductions (that may look excessive)
  • When business deductions are claimed as personal deductions and vice versa
  • When your income doesn’t appear to support your lifestyle
  • Unreported foreign accounts
  • Claiming children who aren’t the taxpayer’s dependents

If there’s anything about your tax return that gives the appearance you’re not accurately reporting your income or deductions, you could be subject to audit.

How Long Does it Take to Get Audited?

The typical audit will last 3 months. However, large corporate cases may take a significantly longer amount of time. The following are variables may extend the length of your audit:

  • Current tax agency backlog
  • The nature of your audit
  • The type of audit
  • Appeal (you can appeal the results of your audit thus increasing the amount of time it will take to complete the entire process)

Keep in mind also that the IRS has up to three years to audit your tax return.