What Do IRS Audit Letters Look Like?

Receiving unexpected mail from the Internal Revenue Service (IRS) can cause immediate concern for taxpayers. The agency sends various types of letters, from simple information requests to notifications of proposed changes to a tax return. Understanding how to identify and respond to legitimate IRS correspondence is important for managing tax obligations and avoiding complications.

Recognizing Official IRS Correspondence

Identifying a genuine IRS letter is the first step in addressing any tax-related communication. Official IRS correspondence arrives via the U.S. Postal Service, often through regular or certified mail. A legitimate letter features the official IRS seal and letterhead, including “Internal Revenue Service” and “U.S. Department of the Treasury.” It also includes a notice or letter number, located in the top-right corner, such as “CP” for computer-generated notices or “LTR” for letter notices.

Authentic letters contain specific identifying information about the taxpayer, such as their name and a partially masked Social Security Number or Taxpayer Identification Number, along with the tax year in question. The language used is professional and formal, providing clear instructions and deadlines without resorting to aggressive threats.

The IRS will never initiate contact about an audit via phone calls, emails, text messages, or social media. The IRS will not demand immediate payment through unusual methods (e.g., gift cards, wire transfers, cryptocurrency) or threaten arrest, deportation, or driver’s license revocation. If a communication exhibits any of these red flags, it is likely a scam. To verify authenticity, taxpayers can cross-reference the notice number on the official IRS website or contact the IRS directly using a phone number obtained from IRS.gov, not from the suspicious letter itself.

Understanding the Contents of an IRS Audit Letter

An IRS audit letter outlines specific details about the examination of a tax return. While the precise content varies depending on the type of audit and the issues involved, certain key elements are present. The letter explicitly states the tax year or years under review, ensuring the taxpayer understands the period being examined. It also identifies the specific issue or item on the tax return that prompted the audit, such as discrepancies in reported income, certain deductions, or claimed credits.

For instance, a CP2000 notice indicates a mismatch between income or payment information reported by third parties (like employers or financial institutions on Forms W-2 or 1099) and what the taxpayer reported on their return. This notice is a proposal for adjustments to income, credits, or payments, not an immediate bill, and it outlines the proposed changes and the data the IRS used to determine them.

A Form 566 serves as an initial contact letter for an audit, requesting specific information to resolve a discrepancy and may include a questionnaire about the audited elements. If the IRS calculates taxes based on unreported income and a return was not filed, a Notice of Deficiency, such as Letter 3219N, may be issued, detailing the proposed tax, penalties, and interest, and providing a 90-day window to petition the U.S. Tax Court. Each letter provides clear instructions on what information or documentation the IRS is requesting, along with a specified deadline for response, 30 days.

Steps to Take After Receiving an Audit Letter

Upon receiving an IRS audit letter, careful review and timely action are important. First, thoroughly read the entire letter to understand its purpose and the specific tax year(s) and issues it addresses, while also noting the response deadline. Deadlines are 30 days, although some notices, like a Notice of Deficiency, allow 90 days to respond or petition the Tax Court. Ignoring the letter can lead to serious consequences, including penalties and increased tax liabilities.

After understanding the request, gather all necessary documents and information that support the claims on your original tax return. This might include receipts, bank statements, W-2 forms, 1099 forms, invoices, or other financial records relevant to the questioned items. Organize these records clearly, making copies of everything to send to the IRS while retaining the originals for your own files.

When preparing your response, include a cover letter summarizing the submitted documents and addressing each item the IRS is questioning. You have options to agree with the IRS’s proposed changes, disagree and provide supporting evidence, or request additional time to respond. If more time is needed, contact the IRS promptly to request an extension, which is a one-time automatic 30-day extension for correspondence audits. Submit your response carefully, by mail to the address provided in the letter, via certified mail with return receipt requested for proof of delivery. For complex situations, or if you feel uncertain about how to proceed, seeking assistance from a qualified tax professional, such as a CPA or enrolled agent, can provide valuable guidance and representation throughout the audit process.