I Got An IRS Audit By Mail…Now What?

That feeling of opening a letter from the IRS to find out you’re being audited…can you really describe it? Terrified? Angry? Confused? Overwhelmed? Like the world is turning against you?

It may be a combination of all these things.

Rest assured, you are not alone.

The IRS audits many people each year to verify income and expenses claimed on tax returns. Many audits are conducted by mail.

Take a deep breath and let’s go through the steps of addressing an audit by mail.

Read the Audit Letter Carefully

The letter explains the issues involved in the audit. It states what information you need to send to the IRS. For example, you may need to provide an itemized list of the expenses or deductions in question.

Gather Your Records

If you keep good records and organize receipts, dealing with an audit by mail might not be a big deal. If you don’t have records, you may be able to provide an explanation about how you determined these numbers. 

Make photocopies of all the requested information. Do NOT send original documents. 

Call the number listed on the audit letter if you have questions or concerns.

Reply to the Audit Letter

Use the envelope provided in your letter of audit to send your documents. If all the documents don’t fit in the envelope, make sure everything is sent to the address specified on that envelope.

You can also fax these documents to the IRS. Check your letter of audit for the appropriate fax number. When faxing documents, be sure to include your name and social security number on each page. This ensures all fax pages you send are associated with your case file.

Deadlines are important. In most cases, you will be given 30 days from the time the letter was sent. If you can’t meet that deadline, call the number on your letter to discuss your situation and request additional time.

Receive a Determination Letter

The IRS will review all the information you provided. You will receive a letter regarding the IRS’s decision.  

If the IRS accepts your documentation, you will get a letter stating your tax return was accepted and filed. No further action is required. Keep the letter for your records. You’re done!

What if the IRS Proposes Changes to Your Return?

If the IRS does not accept your documentation, they will send a letter explaining the proposed changes to your tax return. The letter will contain Form 4549 Income Tax Examination Changes and Form 886-A Explanation of Items. These forms will detail what changes were made to your tax return.

If you agree to these changes, sign the agreement page of the letter. If you owe money, send the payment, along with the agreement, to the address on your determination letter.

If you are due a refund, sign the agreement page of the letter and return it to the address shown. You can expect a refund in 6 to 8 weeks.

Disagree with the Proposed Changes?

If you don’t agree with the proposed changes, do not sign the agreement letter. Send copies of any documentation and an explanation to support your decision. You can also request a telephone conference with an examiner to discuss your tax issue.

If this doesn’t resolve the issue, you can request your case be sent to Appeals. The Office of Appeals is an independent branch of the IRS that impartially handles tax disputes. 
You could learn more about audits by mail in Publication 3498-A The Examination Process (Audits by Mail).

Does Dealing with the IRS Make You Nervous?

You can complete an audit by mail on your own. If you feel confident that you understand the tax laws and can support your position with evidence, the process can run smoothly for you.

But, you don’t have to do it alone–especially if you are unsure how to proceed. If you find yourself overwhelmed, the team at Confidential Tax Relief and Business Consulting can assist you throughout the audit process. Contact our team and we’ll schedule a complimentary consultation for you.