What To Do If You Get Audited By The IRS

There’s no question that being audited by the IRS feels scary.

But take heart: you’ve done nothing illegal. An audit simply means the federal tax agency is reviewing your tax return to determine if your return was filed correctly. Plus, there’s help available should you need some guidance.

You’re more likely to be audited if you’re self-employed, receive much of your income in tips, run a cash-intensive business, or claim the Earned Income Tax Credit (EITC).

That said, if you’ve received an audit notice, it’s important to act as soon as possible. Here’s what AARP Foundation recommends.

Step 1: Understand Your Rights

Review the Taxpayer Bill of Rights from the IRS. This document is available in Spanish, Chinese, Korean, Russian, and Vietnamese and covers what you need to know, including the processes you must follow for each part of an audit.

You’re entitled to:

• An explanation of the audit process from examination and appeal to collection and refunds.
• Representation by an attorney, Certified Public Accountant (CPA), or enrolled agent — someone who has been approved to represent you to the IRS.
• Claim additional deductions that you didn’t originally claim on your tax return.

Step 2: Prepare & Submit Your Documents

Whether you’re asked to respond to the audit by mail or by meeting in person, give the IRS only the documents they are requesting. If you’ve been asked to meet in person, it’s a good idea to meet with a trusted representative — check resources below — to discuss strategies and expected results ahead of time.

During this stage, be sure to:

• Keep a record of all the documents you provide to the auditor.
• Avoid wasting the auditor’s time and triggering a more in-depth audit.
• Request a postponement if you need more time to prepare.

Step 3: Sign Off On The Findings

If your records back up the items claimed on your return, the agent will complete the audit without penalties. You’ll simply pay what may be owed and complete some paperwork. If you disagree with the auditor’s finding, you can ask disputed items to be reviewed with the auditor’s supervisor or through mediation known as Alternative Dispute Resolution (ADR). You can also file an appeal with the IRS Appeals Office within 30 days.

Free Help Is Available

If you’re being audited and earned under the 2023 income ceiling —$36,450 if single, $49,300 if married — you may qualify for free assistance. Learn more at the Low Income Taxpayer Clinic.