IRS audit process
Send us the letter. We will tell you which stage of the IRS audit process you are at, what the IRS wants and what the deadline on it means. Whatever you send us stays confidential.
tax return audits the IRS closed in FY 2025
987,460
underreporter cases closed the same year, which are not audits
$26.8B
additional tax recommended from those audits
IRS figures from the FY 2025 Data Book, via the IRS Compliance Presence page.
Is your IRS letter an audit or a notice
The IRS handles Automated Underreporter cases outside the audit process, and it closed twice as many of them as audits in FY 2025. IRS staff compare what third parties reported against your return. Where the figures differ, the IRS can issue a CP2000 proposing changes.
A CP2000 is not an audit. You respond using the instructions and the deadline printed on the notice itself, and the IRS resolves it on a different track from an examination.
How the IRS picks a return
The IRS selects returns three ways: computer screening, random sampling and related examinations. For screening, the IRS uses the Discriminant Information Function to rank returns by examination potential. Your IRS dif score is that rank, and an IRS classifier then decides whether to select the return.
Selection does not mean the IRS believes you did something wrong. It means the IRS picked your return under one of those methods.
Types of IRS audits
Correspondence audit.
The IRS runs this one remotely and focuses on specific items on the return. In FY 2025 it conducted 81% of its audits this way. You send documents, the IRS reviews them, and it can come back for more.
Office audit.
You bring records to an IRS office. The issues are wider than a correspondence audit: business expenses, rental activity or large itemized deductions.
Field audit.
A revenue agent meets you at your home, your business or your representative's office. The IRS uses field audits for broader and more complex issues, and it can extend an examination to other tax years or to related returns.
What happens at each stage
Selection.
The IRS scores, matches or refers the return and assigns it for examination.
Notice.
The IRS mails a letter naming the tax year, the items under review and a response date. Use the response date shown on that letter.
Examination.
You produce records and the IRS tests them. In a correspondence audit you respond remotely. In an office or field audit you meet the IRS in person.
Proposed changes.
The IRS issues its findings. You agree, disagree, or ask for an appeals conference.
Closing.
The IRS closes an examination as no change, agreed or disagreed.
Five stages, with the response date at stage two
01Selection
The IRS screens, samples or refers the return.
02Notice
The IRS names the year, the items and a date in the letter.
03Examination
You produce records. The IRS tests them.
04Proposed changes
Agree, disagree, or ask for Appeals.
05Closing
No change, agreed, or disagreed.
Dimov Audit. Illustration of the stages only. Durations vary by audit type and scheduling.
Your rights during an IRS audit
You hold ten rights under the Taxpayer Bill of Rights, and we use three of them in every response:
The right to retain representation.
Once you sign Form 2848, the IRS deals with us, and you do not attend the interview unless the IRS summons you.
The right to challenge the IRS position and be heard.
We answer each proposed adjustment with records and the law, and the IRS has to consider the answer.
The right to pay no more than the correct amount of tax.
We check the proposed changes against your records before you agree to any of them.
What to send us
Send us three things:
The letter, every page, including the response date and the IRS contact details.
The return for the tax year named, with its schedules.
The records the letter names, as you have them. We plan around any that are missing.
How to appeal IRS audit findings
The IRS sends you its proposed changes and gives you 30 days to respond.
You accept them, or you ask for a conference with the IRS Independent Office of Appeals. Depending on the amount, the IRS asks for a written protest.
If you do not respond, or Appeals does not resolve it, the IRS issues a notice of deficiency. You have 90 days to petition the Tax Court, or 150 days if the notice is addressed outside the United States.
We prepare the protest, attend Appeals for you under your Form 2848, and tell you when a Tax Court petition is worth filing.
How long each stage takes
The IRS audit process timeline depends on the audit type, issue complexity, requested information, scheduling and whether you agree with the findings. In a correspondence audit you exchange documents with the IRS. For office and field audits the IRS schedules interviews, and it takes longer on complex cases.
You can stretch any of them yourself, by sending an incomplete first response or by missing a deadline. If you do not answer by the response date, the IRS can finish the audit and propose changes on the information it already holds. We publish no day count for the same reasons.
What affects the cost of IRS audit representation
We read the letter, then quote a fixed scope from four factors:
The audit type. A correspondence audit and a field audit are different amounts of work.
The number of tax years and issues in scope.
The state of your records. If we have to rebuild anything before we can respond, we quote that separately.
Whether you take the case to Appeals, which means a protest and a conference.
A single-year correspondence audit with the records in hand is at the light end. These are the factors, not a quote.
Related services
Treat the information here as general, not advice for your circumstances. Ask a CPA to look at your facts before you act on it.
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Reviewed by George Dimov, CPA. Dimov Audit represents individuals and businesses before the IRS across all 50 states.