An IRS correspondence audit is an examination conducted by mail. The IRS sends a letter identifying specific items on a tax return it wants to verify, such as certain income, deductions, credits, or expenses, and asks the taxpayer to provide documentation by a stated deadline. An examiner reviews what is submitted and either accepts the return as filed, proposes changes, or requests more information. There is generally no in-person meeting. Correspondence audits are typically narrower than field or office audits, but they carry the same weight: unanswered or poorly answered requests can lead to additional tax, penalties, and interest.
Because the process happens entirely through letters, it is easy to underestimate. One thing taxpayers consistently underestimate is how much the outcome depends on the quality and organization of the written response rather than on the underlying facts alone.
How a Correspondence Audit Differs From Other IRS Notices
Not every IRS letter is an audit. Many notices are generated by automated matching or processing, such as a proposed adjustment when income reported by a third party does not appear on a return (see our article on what triggers IRS notices). A correspondence audit is a formal examination of specific items on a return, and the letter typically identifies it as such, lists the items under review, and requests supporting documentation. Reading the letter carefully to understand which type of correspondence it is, and what it actually asks for, is the first step.
What Happens During a Correspondence Audit
1. The Initial Letter Arrives
The letter usually identifies the tax year, the specific items being examined, the documents the IRS wants to see, and a deadline to respond. It may also include a form or worksheet to return with the documentation. The IRS generally initiates audits by mail, so unexpected calls, texts, or emails demanding immediate payment should be treated with caution.
2. The Taxpayer Gathers Documentation
The response should address each item listed, and only those items. Typical documentation includes receipts, invoices, bank and credit card statements, canceled checks, contracts, mileage logs, records showing the business purpose of expenses, and reconciliations that tie the return to the underlying records. For businesses, accurate, well-organized bookkeeping and supporting records make this step dramatically easier.
3. A Written Response Is Submitted
A strong response is organized, complete, and easy for the examiner to follow. It usually includes a cover letter summarizing the position on each item, copies of supporting documents labeled to match the items requested, and any explanations needed to connect the documents to the return. Copies should be sent rather than originals, and the taxpayer should keep a complete copy of everything submitted and proof of when it was sent. If more time is needed to gather records, it is generally better to request an extension before the deadline than to miss it.
4. The Examiner Reviews the Response
Correspondence audits are often handled by examiners working through large volumes of cases, and it may take some time to receive a reply. The examiner may accept the documentation, request additional information, or propose changes. In practice, this usually shows up as a follow-up letter asking for clarification on one or two items that were not fully supported in the first response.
What Are the Possible Outcomes?
If the documentation supports the return, the IRS may close the examination with no change. If the examiner concludes that changes are needed, the IRS typically sends a report explaining the proposed adjustments, the additional tax, and any penalties and interest. The taxpayer can agree with the changes and arrange payment, or disagree.
If the taxpayer disagrees, the IRS generally provides an opportunity to submit additional information and explains the right to request review by the IRS Independent Office of Appeals, which is separate from the examination function. If the matter is not resolved, or if the taxpayer does not respond, the IRS may issue a statutory notice of deficiency. That notice carries a strict deadline to petition the U.S. Tax Court if the taxpayer wants to challenge the proposed tax before paying it, and missing it can significantly limit the options available. Every deadline in IRS audit correspondence deserves attention, but this one in particular should never be overlooked.
What Happens If You Don't Respond?
A question taxpayers often ask is what happens if an audit letter is ignored. Generally, the IRS proceeds based on the information it has, which usually means disallowing the items under review, assessing additional tax, and adding penalties and interest. The assessed balance can then move into collection. Responding, even to request more time or to explain that documents are being gathered, almost always leads to a better result than silence.
Should You Get Representation?
Another common question is whether a correspondence audit requires professional help. Simple cases involving one item with clear documentation can sometimes be handled directly. When multiple items are involved, records are incomplete, the amounts are significant, a business return is under review, or the examiner's position seems incorrect, representation by a qualified professional can help organize the response, communicate with the IRS, and protect appeal rights. A representative authorized through a power of attorney can generally handle the correspondence on the taxpayer's behalf (see our article on how IRS representation works).
How to Make Future Audits Easier
What we see most often is that correspondence audits are resolved quickly when records were kept as transactions happened and slowly when they must be reconstructed. Keeping receipts and business purpose notes with each transaction, reconciling accounts monthly, maintaining mileage and travel records contemporaneously, and retaining supporting documents for the period required all reduce both the likelihood and the burden of an audit.
Where to Start
An IRS correspondence audit is a written examination of specific items on a return, and the outcome depends largely on how clearly and completely those items are documented and explained. Reading the letter carefully, meeting every deadline, responding with organized evidence, and understanding your appeal rights give you the best chance of a fair result. If you have received an audit letter, reviewing it promptly with a professional is a practical place to start. Secure Accounting can help you understand the request, organize your documentation, and respond effectively through our tax resolution and compliance services. When you are ready, start a conversation with our team.