Quick Takeaways: How Should I Start Preparing For An Audit?
- Only send copies of the documents the IRS specifically asks for — nothing more.
- Start with the notice. The audit letter itself tells you the scope, type of audit, and deadlines.
- Anticipate triggers that might have raised red flags (inconsistent deductions, mismatched income, suspiciously “round” numbers).
- Work with a tax pro so they can protect you from making costly mistakes.
Got an IRS envelope that says ‘Examination Notice’?
Before you pull every receipt, here’s how to avoid the #1 mistake: sending more than the IRS asked for (and accidentally widening the audit).
If you send the IRS everything you can get your hands on when preparing for an audit, a few things happen:
- They get distracted by irrelevant documents (and may dig into things you didn’t need them to).
- Contradictions can pop up if your records aren’t perfectly aligned.
- It looks like you don’t know what they actually asked for.
Your role is to give the IRS exactly what’s necessary in the clearest way possible. That’s where your trusty DuPage tax professional steps in: you supply the info, we build the framework.
What Documents Should I Never Send to the IRS?
If the IRS asks for advertising receipts, don’t also hand them your travel receipts just because you have them handy. If the audit is for 2022, don’t send documents from 2021 “for context.”
When you’re preparing for an audit, every extra document is an opportunity for the audit to expand.
That’s why the Information Document Request (IDR) matters so much. It’s the IRS’s official shopping list. Keep the documents you share tied strictly to the years and the entity under audit. Nothing more, nothing less.
And always send COPIES of documents, never originals. The IRS is not responsible for returning your original records. Label each page with your name/SSN (or EIN) and the tax year.
What’s the first thing I should do when I get an audit notice?
Before touching a single receipt…
We start by analyzing the IRS notice to understand the type of audit we’re dealing with:
– correspondence (via mail)
– office (you go to them)
– field (they come to you)
Each type requires a different level of preparation.
The notice also spells out which tax years and line items are being examined, and the deadlines. We also want to note the assigned agent’s name and contact information, because this person will be managing your case.
Most letters give ~30 days—check your specific date. If you need time, call the number on the letter to request an extension before the deadline.
Why did the IRS audit my return?
Just as important as knowing what type of audit we’re dealing with, we need to know why you were audited. By spotting these triggers upfront, we can prepare documentation that answers the IRS’s initial questions and shores up the underlying areas where they’re likely to probe deeper.
An audit gets triggered when…
- Mismatch analysis (computer triggers): The IRS’s system spots unreported income, deductions out of industry norms, or math errors.
- Expense categories: Meals, travel, and “miscellaneous” deductions often get extra scrutiny.
- Consistency: Sudden spikes, perfectly round numbers, or inconsistent year-to-year reporting look suspicious.
- Complex credits: Things like R&D credits, digital currency transactions, and basis adjustments often invite audits.
FAQs
“What’s the first thing I should do after receiving an IRS audit notification letter?”
Call your tax pro first. Don’t call the IRS. Don’t send documents. We’ll review the letter, note deadlines, and file a Power of Attorney if needed.
“Should I send the IRS all my documents during a tax audit?”
No. That’s the fastest way to accidentally give them reasons to expand the audit. Only provide what they specifically request.
“How far back can the IRS go in an audit?”
Typically, three years, but if they suspect substantial errors or fraud, it can go back six (and in rare cases, indefinitely).
“Do I have to meet the auditor in person?”
Not always. Some audits are handled entirely by mail (correspondence audits). Others may be at the IRS office or your place of business.
“What if I’m missing receipts or tax records during an IRS audit?”
There are ways we can help you reconstruct records and use secondary evidence. Don’t just ignore the request.
“Can an audit turn into a criminal tax investigation?”
Rarely. It usually happens if the IRS finds signs of intentional fraud. That’s why careful, professional representation matters.
“Does hiring an experienced Naperville tax attorney or CPA for an audit make me look guilty to the IRS?”
No. You have the right to representation, and the IRS will communicate with your authorized representative once a Power of Attorney (Form 2848) is on file.
Now, an audit doesn’t automatically mean you did something wrong. It’s basically the IRS’s way of fact-checking. So, by looking at it like a structured puzzle instead of a chaotic paper chase, we can take control of the process.
This first “pre-game” phase is about what we DON’T do as much as it is about what we DO. And once it’s mapped out, we move on to defending your position with data and navigating communication (both of which I’ll be detailing in upcoming emails, so keep an eye out for those).
But if you’ve already got a notice in your hand, don’t wait. Let’s start building your defense together.