Few pieces of mail provoke more anxiety than an envelope from the IRS marked 'examination.' But an audit is not an accusation, and it's rarely the catastrophe owners imagine. Most audits are routine verifications of specific items, conducted by mail, and resolved with documentation. The owners who fare worst are those who panic, miss deadlines, volunteer too much, or fail to substantiate what they claimed.
The odds of being audited at all are low — well under 1% of individual returns in a typical year — and the large majority of the audits that do happen are correspondence audits handled entirely by mail. The IRS also has a limited window: generally three years from the date you filed to open an examination. Understanding those numbers changes the emotional math. This playbook covers why returns get selected, the three types of audit, exactly what to do in the first 48 hours, how to document your position, and the rights you keep throughout the process.
Why Returns Get Selected
- The DIF score — returns that deviate statistically from norms for similar taxpayers are flagged
- Document mismatches — income that doesn't match the W-2s, 1099s, and K-1s the IRS receives (usually a CP2000)
- High-scrutiny items — large or unusual deductions, recurring losses, home office, 100% business-use vehicles
- Cash-intensive businesses and a small percentage of random selections
The Three Types of Audit
| Type | Where | Severity |
|---|---|---|
| Correspondence | By mail | Most common, least severe |
| Office | At an IRS office | Broader — representation advisable |
| Field | At your location | Most comprehensive — representation strongly advised |
The First 48 Hours
What you do in the first two days sets the tone for the whole audit. The goal is simple: understand exactly what's being asked, protect the deadline, and avoid expanding the scope.
Read the notice and find the deadline
Identify the notice or letter number and the exact response date. The deadline is real — missing it can forfeit your appeal rights and lead to a default assessment.
Verify the notice is genuine
The IRS opens audits only by mail. Confirm the notice number on IRS.gov and, if in doubt, call the IRS at the number listed there — not a number in a suspicious message.
Pinpoint what's actually in question
Most notices question one or two specific line items, not the whole return. Read closely so you respond to the real issue and nothing more.
Gather the supporting records
Pull the return and the documentation behind only the items in question — receipts, statements, logs, and reconciliations.
Decide on representation
For anything beyond a simple one-item mail audit, engage a CPA, enrolled agent, or tax attorney before you respond. They can represent you directly and keep the scope controlled.
Respond precisely to what is asked — no more. Providing extra years, extra documents, or unprompted explanations can expand the scope of the audit. Answer the question on the table, completely and honestly, and stop there.
What to expect once you respond
An audit is a process with a rhythm, not a single event. Knowing the sequence removes much of the dread — most correspondence audits resolve in a few months of back-and-forth by mail, without anyone ever meeting an agent in person.
Acknowledge and organize
Confirm the deadline, assemble the documents for the specific items, and engage a representative if the audit is more than a single clear issue.
Submit your response
Send organized copies with a brief cover letter tying each document to the line item in question. Track the mailing and keep proof of delivery.
Examiner review and follow-up
The examiner reviews your response and may request clarification or additional documents. Answer only what's asked, on time.
Proposed determination
You'll receive a no-change letter or a proposed adjustment explaining any changes and the reasoning behind them.
Agree or appeal
If you agree, you sign and resolve any balance. If you disagree, you can request a manager conference, appeal to the IRS Independent Office of Appeals, or petition the U.S. Tax Court.
Documentation Is the Whole Game
| If the IRS questions… | Provide… |
|---|---|
| Reported income | Bank statements, 1099s, sales records reconciled to the return |
| Business expenses | Receipts, invoices, canceled checks |
| Vehicle deduction | Mileage log, business-use %, total miles |
| Home office | Square footage, exclusive-use evidence |
| Meals & travel | Contemporaneous logs with business purpose |
Beyond having the right documents, how you conduct yourself during the exam matters. The examiner is verifying specific claims, not hunting for a fight — a cooperative, precise, well-bounded response almost always produces the best outcome.
Do
- Respond by the deadline, in writing, to the specific items asked
- Provide organized copies with a short cover summary tying documents to line items
- Keep answers factual, complete, and brief
- Route communication through your representative once one is engaged
- Keep the originals; send copies only
Don't
- Ignore the notice or ask for repeated extensions without cause
- Volunteer other years, other deductions, or unprompted explanations
- Guess or speculate when you don't know an answer
- Argue or get combative with the examiner
- Send original records the IRS could misplace
Outcomes and Your Rights
An audit ends in one of three ways: no change, an agreed adjustment, or a disagreed adjustment. If you disagree, you can request a conference with the examiner's manager, appeal to the independent IRS Office of Appeals, or petition the U.S. Tax Court — and you retain every protection in the Taxpayer Bill of Rights, including the right to representation.
- Keep tax returns and supporting records at least three years — the general audit window
- Keep records six to seven years if there's any chance of a substantial income understatement
- Keep property, home, and depreciation records until three years after you sell the asset
- Keep records of employment taxes at least four years after the tax is due or paid
- Store digitally with backups — reconstructing lost records mid-audit is the weakest position to be in
Florida has no state personal income tax and no state-level individual income audit, so for most Fort Lauderdale filers the audit that matters is the federal IRS examination. The rules, deadlines, and rights described here apply the same nationwide. Businesses may still face Florida sales-and-use tax or reemployment-tax reviews separately, which follow the Florida Department of Revenue's own process.
The outcome is determined far more by preparation and documentation than by the complexity of the return. Read the notice, meet the deadline, document precisely what was asked, volunteer nothing beyond it, and get representation for anything more than a simple mail audit. Handled this way, most audits end as no-change or a manageable adjustment.
Don't face an IRS audit alone
MK Tax & Accounting reviews your notice, builds the documentation, and represents you before the IRS — keeping the scope tight and the outcome as favorable as the facts allow.
Talk to a tax proSources
- IRS — IRS Audits, Examination Process (IRS.gov)
- IRS — The Taxpayer Bill of Rights (IRS.gov)
- IRS — Understanding Your CP2000 Notice (IRS.gov)
- IRS — How Long Should I Keep Records? (IRS.gov)
- Internal Revenue Code Section 6501, Limitations on assessment and collection
- IRS — Appeals, The IRS Independent Office of Appeals (IRS.gov)
Frequently asked questions
Only by mail. The IRS does not initiate audits by phone, email or text — any such contact is a scam. A genuine notice carries a notice or letter number and can be verified by calling the IRS at the number listed on IRS.gov.
For a simple correspondence audit on one clear item you may respond yourself. For office or field audits, or anything involving significant amounts, a CPA, enrolled agent or tax attorney can represent you — often without you needing to attend — and helps keep the scope controlled.
Reconstruct what you can from bank and credit-card statements, vendor records and logs. Some deductions can be substantiated by secondary evidence, though items with strict substantiation rules (travel, meals, vehicles) are at greater risk if undocumented.
Generally three years from the date you filed. That extends to six years if you substantially understated income — omitting more than 25% of your gross income — and there is no time limit at all for a return that was fraudulent or never filed. This is also why keeping records for at least three to seven years matters.
