What Does an Audit Letter Look Like?
Demystify IRS audit letters. Learn to identify official tax correspondence, understand its meaning, and take the right first steps.
An IRS audit letter is an official communication from the Internal Revenue Service, signaling a review of a filed tax return. Its primary objective is to ensure the accuracy of reported financial information and confirm compliance with federal tax regulations. This formal inquiry clarifies discrepancies or verifies specific details within a taxpayer’s declarations.
Authenticating an Audit Letter
Determining the legitimacy of an audit letter is a first step, as fraudulent communications can mimic official IRS notices. A genuine IRS letter features official IRS letterhead, often bearing the agency’s seal, and originates from a designated IRS Service Center. The IRS primarily initiates audit inquiries through postal mail, not unsolicited phone calls, emails, or social media messages. The IRS will never demand immediate payment through unconventional methods, such as gift cards or wire transfers, nor will they threaten arrest for non-compliance.
Legitimate audit letters contain specific identifying information pertinent to the taxpayer and the audit. This includes the taxpayer’s full name, current address, taxpayer identification number (TIN), and the specific tax year or years under review. If there is any doubt about a letter’s authenticity, taxpayers can verify its validity by contacting the IRS directly. Use official IRS phone numbers, such as 1-800-829-1040, found on the IRS official website, rather than any contact information provided in the suspicious letter.
Understanding the Letter’s Content
Once authenticated, the audit letter provides detailed information regarding the IRS’s inquiry. It clearly states the specific tax year or years being examined, helping the taxpayer understand the review’s scope. The letter outlines particular issues or items under scrutiny, such as claimed deductions, reported credits, or potential income reporting discrepancies. This guides the taxpayer on what financial areas require attention.
The letter also identifies the type of audit being conducted. A correspondence audit involves exchanging information and documents primarily through mail. An office audit requires the taxpayer to schedule and attend an appointment at a local IRS office, bringing requested records. A field audit means an IRS agent will visit the taxpayer’s home or business location to conduct the examination. The communication also provides the name, title, and direct contact information, including a phone number and mailing address, for the specific IRS employee assigned to the audit.
The audit letter enumerates the specific records, documents, or explanations the IRS requires to resolve identified issues. This list might include receipts, bank statements, invoices, or other financial documentation that supports the tax return information. A precise response deadline will be prominently stated, indicating the timeframe for submitting requested information or taking specified action.
Initial Actions After Receiving a Letter
Upon receiving an authentic audit letter, timely action is essential. Ignoring the letter is not advisable, as failure to respond by the stated deadline can lead to penalties or an unfavorable resolution based solely on IRS information. The first step involves carefully noting the response deadline provided in the letter and planning accordingly.
The next action involves gathering and reviewing all specific documents and information requested by the IRS. This requires meticulous organization to ensure necessary records, such as income statements, expense receipts, or other financial proofs, are readily available. When submitting these documents, send only copies; original documents should always be retained by the taxpayer.
Maintaining detailed records of all IRS interactions is a prudent practice. This includes keeping copies of all documents sent to the agency, a log of phone calls, and any correspondence received or sent. For complex issues or if uncertainty arises, consider professional advice from a qualified tax professional, such as a Certified Public Accountant (CPA), an Enrolled Agent, or a tax attorney. Responses to the IRS, whether mailing requested documents or scheduling an office audit appointment, should adhere strictly to the instructions provided in the audit letter.