IRS Audit Letters: What to Expect at Every Stage

From the initial contact letter to the closing letter, here is every piece of correspondence you will receive during an IRS audit.

The Initial Contact

An IRS audit begins with a letter. For correspondence audits, you receive a notice requesting specific documentation. For office audits, you receive a letter scheduling an appointment at an IRS office. For field audits, a revenue agent contacts you to schedule a visit to your home, office, or your representative's office.

The initial contact (such as Letter 2205-A for a field examination or CP75 for certain credit audits) tells you what is being examined and what records you need to provide. Read it carefully. The IRS is specific about what it wants, and a complete, focused response is the right strategy.

Information Document Requests

During the audit, the examiner may send an information request such as Letter 566 or Form 4564. These requests identify records such as bank statements, receipts, contracts, and mileage logs. Respond to every item. If you do not have a document, explain why and provide alternative substantiation.

The 30-Day Letter

If the examiner proposes changes you disagree with, you will receive a 30-day letter (Letter 525 or Letter 950). This letter explains the proposed adjustments and gives you 30 days to either agree, partially agree, or file a written protest requesting an Appeals conference. This is your best opportunity to resolve the dispute without going to court.

Appeals Conference

If you file a protest, your case goes to IRS Appeals. An Appeals officer reviews the case independently and attempts to negotiate a settlement. Appeals will send you a letter acknowledging the case and setting up the conference, and eventually a letter with its decision.

Statutory Notice of Deficiency

If you do not agree at Appeals, or if you skip the 30-day letter entirely, the IRS sends a statutory notice of deficiency (such as Letter 3219 or Letter 531). This is the 90-day letter that gives you the right to petition Tax Court. It is the last step before the IRS can legally assess the additional tax.

The Closing Letter

If the audit results in no changes, you receive a no-change letter confirming the case is closed. Keep this letter permanently. It is your proof that the IRS examined those items and accepted them.

An audit is a process with defined steps and defined rights. Know the steps, exercise the rights, and the audit becomes manageable instead of terrifying.