I received an audit (examination) to my tax return, what do I need to do

If you have received a notice that your tax return is being audited (examined), here are the steps you need to follow:

1. Review the Notice: Carefully read the letter from the IRS. It will specify the items on your return that are being questioned and the documentation you need to provide.
2. Gather Documentation: Collect all the records and documents that support the items on your tax return. This may include receipts, bank statements, canceled checks, or other relevant documents.
3. Respond to the IRS: You must respond by the deadline given in the letter. If you need more time, contact the IRS to request an extension. You can respond by mail or request a personal interview with an examiner.
4. Submit Documentation: Attach photocopies of your original documents to the letter and send them to the address provided or fax them to the number provided. Do not send original documents. If you are unable to provide verification of an amount claimed, provide an explanation of the issue and how the amount was determined.
5. Review Proposed Changes: Once the IRS reviews your documentation, they will either accept your return as filed or propose changes. If changes are proposed, they will send you a letter explaining the changes.
6. Agree or Disagree with Changes:
   • If You Agree: Sign the agreement page of the letter and pay any additional tax, penalties, and interest you may owe. If you are due a refund, sign the agreement page and return it to the IRS.
   • If You Disagree: Do not sign the agreement page. Instead, send additional documentation and an explanation to support your position. You can also request a conference with the examiner’s manager or request that your case be sent to the IRS Independent Office of Appeals.
7. Appeal Rights: If you do not agree with the examiner’s proposed changes, you can appeal the decision. You must send a written request for an appeals conference to the address on the letter within the specified timeframe. If the amount you want to appeal is greater than $25,000, you may need to file a formal written protest.
8. Tax Court: If an agreement is not reached and you do not respond, the IRS will send you a Statutory Notice of Deficiency by certified mail. You have 90 days from the date on the notice to petition the U.S. Tax Court without paying the tax. If you do not petition the Tax Court, the tax will be assessed.
9. Seek Assistance: If you need help, you can contact the Taxpayer Advocate Service or a Low Income Taxpayer Clinic. These services can provide assistance if you are experiencing financial difficulty or if the IRS has not resolved your tax issues properly.
10. Keep Records: Keep copies of all correspondence and documentation you send to the IRS. This will help you track the progress of your case and provide evidence if needed.

By following these steps, you can ensure that you respond appropriately to the IRS audit and protect your rights as a taxpayer.

Sources:
Publication 556
Publication 1 (9/2017)
Publication 5 (4/2021)
Publication 3498-A (05/2021)
Publication 3498 (11/2004)
Publication 1380
Publication 334 (2023)