Getting an IRS audit letter can be stressful. However, not all audits are the same. A correspondence audit, handled entirely by mail, is the most common type. It is also usually the simplest. Here is what you need to know to handle a correspondence audit well.
What is a correspondence audit?
In a correspondence audit, the IRS asks you by mail for documents or explanations about specific items on your return. For example, it may ask you to support a deduction, a credit or a type of income. You respond by mail, fax or the IRS online upload tool, without meeting an agent in person.
Why you might get a correspondence audit
- Mismatched income. Your return may not match forms from employers, banks or brokers.
- Unusual deductions or credits. Amounts that differ a lot from similar returns may draw attention.
- Random selection. The IRS also picks some returns through statistical sampling.
How to prepare for a correspondence audit
- Read the letter carefully. Note exactly which items the IRS is asking about and the deadline.
- Respond on time. If you need more time, ask before the deadline. Otherwise, the IRS may assess tax without your input.
- Gather your records. Collect receipts, bank statements, forms and other proof for each item.
- Review your return. Recall how and why you reported each questioned item.
Tips for responding
- Be clear and focused. Answer only what the IRS asked, and organize your documents by item.
- Keep copies. Save a copy of everything you send, plus proof of delivery.
- Get help if unsure. A tax professional can review your response before you send it.
For more on the process, see the IRS page on IRS audits.
What happens after you respond
The IRS reviews your documents. If they answer its questions, the IRS closes the audit, often with no change. If not, it may ask for more information or propose changes. In that case, you can agree, provide more support or appeal.
How FTCG helps with a correspondence audit
- Document review. We help you gather and organize the right records.
- Representation. With a power of attorney, we can communicate with the IRS for you.
- Strategy. We explain your options, including appeals if needed, and help you avoid future issues.
Learn more about our IRS audit representation services.
Get help with your correspondence audit
To discuss your IRS letter, call (415) 842-2940 or book a free 15-minute call.