What Happens During an IRS Audit? Process, Deadlines & Rights
An envelope from the Internal Revenue Service can ruin an afternoon. Yet most IRS letters are not full audits, and most audits are resolved through the mail. Knowing which letter you have, which deadline applies, and who can represent you makes the difference between a quick fix and a costly mistake.
This guide explains how IRS audits work, what triggers them, the deadlines that matter, and how to decide whether you need a tax attorney, a CPA, or an enrolled agent.
Key Takeaways
- Fewer than 0.4% of individual tax returns were examined in fiscal year 2024, according to IRS Data Book figures.
- Most audits are correspondence audits handled entirely by mail.
- Many IRS notices carry response windows of 30 days, and a Notice of Deficiency gives you 90 days to petition the U.S. Tax Court.
- A tax attorney offers attorney-client privilege, which also covers matters that could turn criminal. The federal tax practitioner privilege available to CPAs and enrolled agents does not.
How Common Are IRS Audits?
Audits are less common than most people fear. In fiscal year 2024, the IRS closed 505,514 tax return audits, which produced $29 billion in recommended additional tax. Fewer than 0.4% of individual returns were examined. The rate climbs sharply at the top: returns reporting $10 million or more in total positive income faced an examination rate of about 7.9%.
Low odds do not mean low stakes. An audit that finds unreported income can lead to back taxes, interest, and penalties that grow the longer the matter stays open.
Types of IRS Audits
| Audit Type | How It Works | Typical Scope |
| Correspondence audit | Conducted by mail. The IRS asks for documents on specific items. | One or two line items, such as a deduction or credit |
| Office audit | You or your representative meet an IRS employee at a local IRS office. | Several items, often business or rental income |
| Field audit | A revenue agent visits your home or business to review records. | Broad review of books, typically for businesses |
Correspondence audits make up the large majority of examinations.
What Triggers an Audit?
The IRS relies heavily on automated matching. Employers, banks and brokers file information returns such as Forms W-2 and 1099, and the IRS compares those forms against what you reported. When the numbers do not match, the Automated Underreporter program sends a notice, often a CP2000, proposing changes.
Other common triggers include:
- Business expenses that look large relative to income
- Rental losses and home office deductions
- Refundable credits claimed without full support
- Large charitable deductions, especially noncash gifts
- Unfiled returns, which can lead the IRS to prepare a substitute return using third-party data
What to Do When You Get an IRS Letter
- Identify the notice. The notice number sits in the top or bottom right corner. A CP2000 proposes changes based on mismatched data. A letter scheduling an interview signals an office or field audit.
- Mark the deadline. Response windows are short. Missing one can let the IRS finalize its proposed changes without your input.
- Pull your records. Gather the return in question, bank statements, receipts and any forms the notice references.
- Do not overshare. Answer the specific items requested. Volunteering unrelated information can widen the scope.
- Decide on representation. You can respond yourself, but you also have the right to be represented. An authorized representative files Form 2848 and can speak with the IRS on your behalf.
Deadlines That Matter
| Deadline | What It Means |
| Response date on the notice | Often 30 days for proposed-change notices such as a CP2000 |
| 90 days after a Notice of Deficiency | Window to petition the U.S. Tax Court without paying the tax first (150 days if the notice is addressed to you outside the U.S.) |
| 3 years from filing | General period the IRS has to assess additional tax |
| 6 years from filing | Extended period when income is understated by more than 25% |
Tax Attorney vs. CPA vs. Enrolled Agent
All three can represent you before the IRS. The differences show up in privilege, litigation and complex exposure.
| Professional | Can Represent in Audits | Can Litigate in Tax Court | Privilege |
| Tax attorney | Yes | Yes | Attorney-client privilege, including criminal matters |
| CPA | Yes | Only if admitted to practice before the Tax Court | Limited federal tax practitioner privilege, which does not apply in criminal matters |
| Enrolled agent | Yes | Only if admitted to practice before the Tax Court | Same limited federal privilege |
A CPA or enrolled agent is often enough for a simple correspondence audit about a single deduction. A tax attorney makes more sense when:
- The audit could expose fraud or willful underreporting
- You have years of unfiled returns
- Foreign accounts or FBAR issues are involved
- The case may head to IRS Appeals or the Tax Court
- The IRS has started collection action such as liens or levies
How to Choose a Tax Attorney
Look past general practice lawyers who list tax as one service among many. Strong candidates share a few traits:
- Focused tax practice. Audits, appeals and collections should be the core of the work.
- IRS procedural knowledge. Attorneys who understand how examiners and Appeals Officers evaluate files can anticipate the next request.
- Tax Court experience. If your case may be litigated, your attorney should be able to take it there.
- Direct attorney involvement. Ask who will handle your file day to day.
- Clear fee structure. Ask whether the matter is billed hourly or at a flat fee, and what is included.
Finding Help in Collin County
These criteria apply anywhere, including growing areas such as McKinney and the rest of Collin County. Taxpayers facing an audit should focus less on location alone and more on whether an attorney has experience with the specific IRS procedure involved.
For example, someone looking for a tax attorney mckinney tx can evaluate counsel based on prior IRS experience, familiarity with appeals, and the ability to handle a dispute if it reaches the U.S. Tax Court. Gregory Law Group is one local example because its attorneys previously worked in the IRS Office of Chief Counsel. That background is relevant when comparing attorneys for an IRS audit, but it should be considered alongside the facts of the case, the attorney’s role, and the type of representation required.
Bottom Line
An IRS audit is a process with rules, deadlines, and rights on your side. Read the notice, mark the deadline, gather records, and answer only what is asked. For a single mismatched form, you may handle it yourself or with your tax preparer. When the dollars are large, the years are many, or criminal exposure is possible, bring in a tax attorney before you respond.
This article is for general information and is not legal or tax advice. Consult a qualified professional about your situation.