Am I in Trouble if I Receive an IRS Audit Notice?

Use these links to jump to different sections:

• Audits Are Often More Bark Than Bite
• Take the Time to Read Your Audit Notice
• Organize Financial Documents and Records
• Get Professional Tax Guidance

It’s a nightmare for every taxpayer: An audit by the Internal Revenue Service (IRS). Audits are frustrating, complicated, and stressful. No one wants to deal with them. The good news, however, is that they are somewhat less common than many people realize, totaling less than one percent of all federal tax returns filed in the United States.

As uncommon as they may be, most people still fear that an audit means they’re in trouble. Just because you are facing an income tax audit, though, it does not necessarily mean you did anything wrong.

Audits Are Often More Bark Than Bite

Often, the fear surrounding an IRS audit is actually far worse than the audit itself.

Most IRS audits are selected by a computer system, or they are selected entirely at random. For example, you may face an audit because the IRS office received “mismatched information.”

In many cases, that mismatched information can be easily resolved once the IRS requests additional tax information.

Take the Time to Read Your Audit Notice

If you are being audited, you should expect to receive a notice indicating that fact, including the type of audit. As explained by the IRS, audit notifications are submitted by mail. You will not receive notice of an IRS audit over the phone. If you do, you are likely dealing with a scam. In fact, the majority of audits are conducted entirely through the mail (known as correspondence audits).

However, some businesses or higher-income taxpayers may be subject to either:

• An in-person office audit held at a regional IRS office; or
• A field audit, when an IRS agent visits you at your home or place of business

In either case, you should receive a written notification before an IRS auditor visits you.

Organize Financial Documents and Records

Well-organized documentation is one of the keys to successfully—and painlessly—resolving an IRS tax audit. If you receive an audit notification, you need to take immediate action. After reading the audit letter and assessing the situation, your next step should be to gather all relevant financial documents and financial records for the tax year.

The more information that you have in your possession, the better off you will be.

Get Professional Tax Guidance

Finally, taxpayers should always be ready to seek professional support. Dealing with an IRS audit process can be deeply stressful. You do not have to go through this process by yourself. An experienced tax professional can review the audit notice and all of your available financial records and help you take the appropriate steps to protect your rights and interests.

If you or your business is currently facing an audit from the IRS, you should not hesitate to contact an experienced tax attorney. To learn more about this area of tax law, see our tax overview.