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How to Prepare for an Income Tax Audit


Read the notice carefully. Some audits involve only parts of a single year's tax return, while others can include entire returns for multiple years. In addition, some audits request information by mail, while others require a meeting with an IRS agent. Understanding what the IRS is asking for is vital to ensure that you prepare precisely for the specified audit.


Start immediately. You will need plenty of time to pull your information together, to request information from others, such as charities, credit card companies, and banks and to work with a tax professional.


Consult a tax accountant or lawyer. The tax codes are extremely complex, and require years of study to fully comprehend. It's best to take the advice of professionals when responding to an audit. They can tell you what the audit means, what the consequences might be, and the exact information you will need to provide.


Gather the required information. Hopefully, you stored all of the relevant receipts and other information when you filed your tax return, and so you will have an easy time of creating copies in preparation for the audit. If not, then you will need to locate all of the required information.


Organize your information. Now that you have all of your information in place, put it in the proper order. All of the information should be laid out as in the audit notice. That way, it will be easier for you and your tax professional to double-check your information and have it ready for the response.


Respond to the audit. If your audit is in person, either you or your tax professional can represent you to the IRS agent. If you are not required to be at the audit, have your professional attend alone with a power of attorney. If your audit requires that you mail your response to the IRS, then send copies only and ensure that you've answered all of the issues outlined in the audit notice.


Act on the IRS findings. You may have to pay an additional amount to the IRS, return part of a refund, or you may receive money back. You also have the right to appeal the IRS agent's findings to his supervisor or the IRS Appeals Division, and you can take your case to the U.S. Tax Court.

Tips and Warnings

  • Only a tax accountant or lawyer can fully advise you on how to respond to an IRS audit.
  • Give only the information requested in an audit-no more, and no less.
  • Provide copies of tax documents to the IRS, never originals.

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