IRS Tax Audit Defense: Know The Type, Know Your Rights
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The three kinds of IRS audit, compared
"Audit" sounds like one thing, but the IRS runs three very different kinds, and the kind you got tells you almost everything about how serious it is and how to respond. The vast majority are handled entirely by mail. Here is how the three compare before we get into your rights and how to push back.
| Audit type | Where it happens | What it covers | How serious |
|---|---|---|---|
| Correspondence audit | By mail only | One or a few specific items, a credit, a deduction, unreported income, where the IRS wants documentation. | Most common by far (roughly 3 in 4 audits). Usually narrow and resolvable by sending records. |
| Office audit | At a local IRS office | A broader set of items than a mail audit; you bring specific records and answer questions in person. | More involved. The IRS wants to see and discuss documents directly. |
| Field audit | At your home, business, or your representative's office | The most comprehensive review, often covering a whole return or a business's books. | The most serious. Conducted by a revenue agent and broad in scope. |
The IRS chooses returns for audit through scoring formulas, document mismatches (a 1099 that does not match your return), and related examinations. Being selected does not mean you did anything wrong.
What to do when you get an audit notice
Whatever the type, the playbook rhymes: read exactly what is being questioned, respond by the deadline, and send only what is asked for.
- Respond in writing and on time. For a mail audit, send copies (never originals) with a clear cover letter tying each document to the item questioned.
- Answer only what is asked. Volunteering unrelated information can widen the scope of the audit.
- Keep it organized. Label documents to match the notice so the examiner can see your support at a glance.
- You may be represented. You have the right to have an authorized representative, an attorney, CPA, or enrolled agent, deal with the IRS for you, and to record certain in-person interviews with notice.
Your rights: the Taxpayer Bill of Rights
Every audit is governed by the Taxpayer Bill of Rights, ten fundamental rights the IRS must respect. Several matter most during an examination:
How an audit ends, and how to appeal
An audit closes in one of three ways: no change (you substantiated everything), agreed (the IRS proposes changes and you accept them), or disagreed (the IRS proposes changes you do not accept). If you disagree, you have real options and you do not have to accept the first proposal.
- Talk to the examiner's manager. You can request an informal conference with the examiner's supervisor to resolve a disagreement.
- Go to Appeals. You can request a conference with the IRS Independent Office of Appeals, which is separate from the examination team. This request, called a protest, is made in writing and states why you disagree with each proposed change.
- Court, if needed. If Appeals does not resolve it, you generally retain the right to take the matter to court.
Getting the right help for a serious audit
A correspondence audit over a single deduction is often something you can handle yourself. An office or field audit, a large proposed balance, or anything touching a business is where independent professional representation earns its keep, an enrolled agent, CPA, or tax attorney can speak to the IRS for you and manage the appeal. Matching the seriousness of the audit to the right kind of help is the whole game.
"Since 2001, the first thing I tell anyone who opens an audit letter is: figure out which of the three types you got before you panic. Most audits are correspondence audits over a single item, and they are handled by mail with the right receipts. Office and field audits are a different animal, and that is where having someone speak to the IRS for you pays off. Read the notice, answer only what is asked, keep copies of everything, and remember you have the right to appeal, the first proposal is rarely the last word."
Eric Pemper, Founder of CuraDebt since 2001
You can also read about your tax debt relief options and how Currently Not Collectible status works.
Frequently Asked Questions
What are the three types of IRS audits?
The IRS conducts correspondence audits (by mail), office audits (at a local IRS office), and field audits (at your home, business, or your representative's office). Correspondence audits are by far the most common and typically question one or a few specific items. Office and field audits are broader and more serious, with field audits being the most comprehensive.
What is a correspondence audit?
A correspondence audit is handled entirely by mail and is the most common type, making up roughly three of every four IRS audits. The IRS questions specific items on your return, such as a credit, deduction, or unreported income, and asks you to send documentation. You respond by mailing copies of the records that support those items by the deadline in the notice.
What is the difference between an office audit and a field audit?
An office audit takes place at a local IRS office, where you bring specific records and answer questions about a broader set of items than a mail audit covers. A field audit is conducted by a revenue agent at your home, business, or representative's office and is the most comprehensive type, often reviewing an entire return or a business's books.
What should I do when I get an audit notice?
Read the notice carefully to identify the exact tax year and items being questioned, and note the response deadline. Gather documentation that substantiates each questioned item, respond in writing and on time, and send copies rather than originals. Answer only what is asked, keep copies of everything, and consider authorized representation for an office or field audit.
What is the Taxpayer Bill of Rights?
The Taxpayer Bill of Rights is a set of ten fundamental rights the IRS must respect in every interaction, including audits. They include the right to be informed, the right to quality service, the right to challenge the IRS's position and be heard, the right to appeal in an independent forum, the right to retain representation, and the right to a fair and just tax system.
Can I have someone represent me in an audit?
Yes. You have the right to retain an authorized representative, such as an attorney, CPA, or enrolled agent, to deal with the IRS on your behalf. Representation is especially valuable in office and field audits or when a large balance is proposed, because your representative can attend meetings, respond to the IRS, and manage any appeal for you.
How does an IRS audit end?
An audit closes in one of three ways: no change, meaning you substantiated everything reviewed; agreed, meaning the IRS proposed changes and you accept them; or disagreed, meaning the IRS proposed changes you do not accept. If you disagree, you can request a conference with the examiner's manager or take the matter to the IRS Independent Office of Appeals.
How do I appeal an IRS audit decision?
If you disagree with the proposed changes, you can request an informal conference with the examiner's manager, then request a conference with the IRS Independent Office of Appeals, which is separate from the examination team. This request, called a protest, is made in writing and explains why you disagree. If Appeals does not resolve it, you generally retain the right to go to court.
What is an audit reconsideration?
An audit reconsideration lets you ask the IRS to re-examine a closed audit if you have documentation you did not previously provide or if the assessment came from a Substitute for Return. It is not granted automatically, but it is a genuine option when you have new records or believe the original result was wrong. You request it in writing with the supporting documents.
Does CuraDebt represent me in an IRS audit?
No. CuraDebt does not contact the IRS, attend audits, or represent you. CuraDebt is a free service that reviews the information you submit and matches you with an independent tax relief firm equipped for your situation; that independent firm, not CuraDebt, provides any audit representation. CuraDebt is not a law firm or CPA firm and does not give legal or tax advice.
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