Correspondence, office, and field audits: what to expect from each

Every audit starts the same way: a letter

The IRS says it begins audits by mail and won’t initiate one by phone. The letter tells you which return is being examined, how the exam will be conducted, and what to send or bring. If someone calls claiming you’re under audit and you haven’t received a letter, treat it as a likely scam and verify through irs.gov.

Being selected doesn’t mean the IRS thinks something is wrong. Returns are chosen by computer screening against norms for similar returns, because they’re connected to another taxpayer under exam, or because third-party forms don’t match. IRS guidance is explicit that an exam may end with no change, or even a refund.

What differs is the format. There are three, and each calls for a different level of preparation.

Correspondence audits: handled by mail

Most IRS audits are conducted entirely by mail. A correspondence audit usually focuses on one or a few specific items, such as a particular deduction, a credit, or a category of expenses.

The letter will say what’s being examined and what documents to send. You respond in writing with copies of your support and a brief explanation. There’s no meeting, and you can have a CPA, enrolled agent, or attorney handle the correspondence with a signed Form 2848.

These are the most manageable audits, but treat them seriously. Answer by the deadline, send exactly what’s requested, organized and labeled, and keep copies of everything. If your response is incomplete or late, the examiner may simply disallow the item and send a report proposing more tax.

• Lead with a one-page cover letter listing each item under review and the exhibit that supports it
• Number your exhibits and reference them by number
• Send copies, never originals, and use the IRS upload tool or trackable delivery
• If you need more time to gather records, ask before the deadline, not after

Office audits: an appointment at an IRS office

An office audit is an in-person interview at a local IRS office, conducted by a tax compliance officer. The letter will typically list the issues under review and the records to bring.

These tend to cover more ground than a mail audit, and the examiner may ask follow-up questions on the spot. Preparation matters: bring organized records for the listed items only, answer the questions asked, and don’t volunteer unrelated information or speculate. “I’ll need to check and get back to you” is a perfectly good answer.

You have the right to be represented. A representative with a power of attorney can attend with you or, in most cases, in place of you. If you start the interview alone and decide you want to consult a representative, the IRS says it will suspend and reschedule — unless you’re there under an administrative summons.

Field audits: the IRS comes to you

A field audit is conducted by a revenue agent at your home, place of business, or your representative’s office. These are usually reserved for more complex returns involving businesses, multiple entities, or significant income, and they can span more than one year.

Field audits can be broad. Expect formal document requests on Form 4564, an Information Document Request; interviews about how the business earns money, handles cash, and keeps its books; and possibly a tour of the premises and a look at your accounting system. The agent may test gross receipts by comparing bank deposits to reported income.

If the time or place isn’t workable, the IRS says the examiner will try to arrange something more suitable, and many field exams are held at the representative’s office. For a field audit, professional representation is strongly advisable.

• Respond to each Information Document Request completely and on schedule
• Keep a log of what you’ve provided, to whom, and when
• Ask for clarification rather than guessing at what an agent wants
• Route communication through your representative where possible
• Prepare a clean bank-deposit-to-revenue reconciliation before the first meeting

A worked example: the same issue, three ways

Take a consultant who deducted $42,000 of travel and meals on a Schedule C with $260,000 of revenue.

In a correspondence audit, the letter asks for support for travel and meals only. She sends a spreadsheet by trip, receipts, calendar entries showing the client purpose, and a short explanation. The examiner accepts most of it and disallows about $3,000 of meals without a documented business purpose.

In an office audit, the same issue comes with questions: which clients, why the travel was necessary, whether any trips mixed personal days. In a field audit, the agent might also reconcile her deposits to revenue, review contractor payments, and ask about the home office. The underlying records are the same in every case; what changes is how many areas they’re tested against.

Timing, interest, and the statute date

The IRS generally has three years after a return is due or filed, whichever is later, to assess additional tax. If an exam is running close to that date, the examiner may ask you to sign a consent extending it. You can refuse, negotiate the scope or length, or sign; refusing usually means the IRS moves quickly to assess based on what it has. Appeals generally needs about 365 days left on the statute to take a case, which is why consents are common in contested exams.

Interest runs from the original due date on any additional tax. If you expect to owe, you can make an advance payment or a deposit under Section 6603 during the exam to stop interest on the amount paid. For the fourth quarter of 2026, the IRS rate on individual underpayments is 7% a year, compounded daily.

How any audit ends

Every audit reaches one of three outcomes: no change, agreed, or unagreed.

If there’s no change, you’ll receive a letter saying so; keep it with your records. If you agree with proposed adjustments, you sign the examination report (often Form 4549) and pay or arrange to pay the tax, interest, and any penalties.

If you disagree, ask first for a conference with the examiner’s manager. Fast Track Settlement, where a trained Appeals employee mediates during the exam, may also be available. Otherwise you’ll receive a 30-day letter explaining your right to appeal to the IRS Independent Office of Appeals. If the proposed change in tax and penalties is $25,000 or less for each period, a brief small case request is enough; above that, and for partnership and S corporation cases, a formal written protest is required.

If the case isn’t resolved, a statutory notice of deficiency follows, giving you 90 days to petition the U.S. Tax Court. Throughout, you have rights under the Taxpayer Bill of Rights, and the Taxpayer Advocate Service can help if the process has stalled or is causing hardship.

What good representation actually does

A representative doesn’t make records appear that don’t exist. What they do is frame the response around the issues actually under exam, keep the scope from drifting, meet deadlines, and know when an agreed result is reasonable versus when to appeal. When Tally Tax represents a client in an exam, most of the work happens before the first contact: organizing support, reconciling income, and spotting weak areas before the examiner does.

Frequently asked questions