The LTR 220 is the IRS telling you your return has been selected for examination. This is the first contact in the audit process. The letter identifies the tax year under examination, the type of audit (correspondence, office, or field), and may identify the specific issues the IRS wants to examine.
What "Selected for Examination" Means
Returns are selected for audit through several methods: statistical scoring (the DIF score), information matching that revealed discrepancies, related examinations (your business partner was audited), specific compliance initiatives targeting certain industries or deductions, and random selection.
Being selected doesn't mean you did anything wrong. It means the IRS wants to verify that your return is accurate. Many audits result in no change to the taxpayer's return.
Your Immediate Steps
Don't panic. Read the letter carefully to understand the scope. If the letter identifies specific issues, focus your preparation there. If it's a broad examination, prepare to substantiate everything on your return.
Pull your complete return for the year in question. Start gathering supporting documentation: W-2s, 1099s, receipts, bank statements, cancelled checks, mileage logs, contracts, and anything else that supports the numbers on your return. The more organized you are from the start, the smoother the process.
Representation
Consider hiring representation immediately. Don't wait until the audit is underway. A tax professional can review your return, identify potential weak spots, prepare your documentation package, and handle all communications with the examiner. Having professional representation from the first contact typically produces better outcomes than bringing someone in after problems have already surfaced.
With a signed Form 2848, your representative handles everything and you don't have to interact with the IRS directly.
Respond on Time
The LTR 220 typically includes a deadline to respond or a scheduled appointment. If you need more time to prepare, contact the examiner and request an extension. Auditors generally grant reasonable extensions at the initial stage. But don't ignore the letter. Non-response signals non-cooperation, which changes the auditor's approach to your case.
If you've received an LTR 220, call us at (813) 229-7100. Early representation produces the best audit outcomes.