Understand Audit Notice
1-2 hoursIdentify audit type (correspondence, office, or field), specific tax years and items questioned, and response deadline.
Field context
This workflow is part of 3 niche fields
Tax audit preparation guide for IRS notice types, document organization, representation options, common audit triggers, and response timelines.
Identify audit type (correspondence, office, or field), specific tax years and items questioned, and response deadline.
Collect W-2s, 1099s, receipts, bank statements, mileage logs, and prior returns for audited years plus one year before and after.
Verify each questioned deduction has supporting documentation. Recalculate using tax calculator to confirm original return accuracy.
Create indexed response with cover letter, copies (never originals) of documents, and clear explanation for each item.
Evaluate whether to handle alone, use CPA/enrolled agent, or hire tax attorney based on complexity and potential liability.
Recalculate tax liability to verify original return accuracy. · Model tax impact if audit adjustments are applied.
Reconcile business income and expenses against bank records.
Document business expense calculations with per-unit pricing.
Compare representation costs across CPAs, EAs, and attorneys.
Understanding audit type helps prepare appropriate documentation and response strategy.
| Audit Type | Conducted By | Typical Scope | Duration |
|---|---|---|---|
| Correspondence | 1-3 specific items | 3–6 months | |
| Office | IRS office | Multiple schedule items | 1 day meeting |
| Field | Agent at your location | Full return review | Weeks to months |
| TCMP | Specialized team | Large/complex returns | Months to years |
Missing the response deadline results in automatic assessment — always request extension in writing if needed.
Dedicated business bank account makes audit defense 10x easier — commingled funds raise red flags.
Use GPS mileage tracking apps going forward — reconstructed logs are less credible than contemporaneous records.
If audit reveals unpayable liability, IRS Offer in Compromise may settle for less — requires financial disclosure.