Received an IRS Audit Notice? Here’s What to Do
Few things cause more anxiety for a business owner or individual taxpayer than receiving a letter from the IRS. But before you panic — take a breath. An IRS audit doesn’t automatically mean you did something wrong. At Alpha CPA LLC, we guide clients through the audit process with confidence and expertise. Here’s what you need to know.
What Is an IRS Audit?
An IRS audit is a review of your tax return to verify that your income, deductions, and credits are accurate. Audits can be triggered by:
- Random selection — The IRS randomly selects a small percentage of returns each year
- Discrepancies — Mismatches between your return and information reported by employers or banks
- Unusual deductions — Deductions that are disproportionately large relative to your income
- Business losses — Repeated losses on Schedule C can raise flags
Types of IRS Audits
- Correspondence Audit — The most common type. The IRS sends a letter requesting documentation for specific items. This is handled entirely by mail.
- Office Audit — You’re asked to visit an IRS office with supporting documents.
- Field Audit — An IRS agent visits your home or business. This is the most comprehensive type.
Step-by-Step: What to Do When You Receive an Audit Notice
Step 1: Don’t Ignore It
Ignoring an IRS notice only makes things worse. Read the letter carefully to understand exactly what is being questioned and what the deadline is.
Step 2: Contact a CPA Immediately
This is not the time to go it alone. A qualified CPA can represent you before the IRS, communicate on your behalf, and ensure your rights are protected. Alpha CPA LLC has extensive experience in IRS representation.
Step 3: Gather Your Documentation
Collect all relevant records — receipts, bank statements, invoices, payroll records, and any other documentation that supports the items in question.
Step 4: Respond Timely and Accurately
Never provide more information than what is specifically requested. Your CPA will help you craft a precise, professional response.
Step 5: Know Your Rights
As a taxpayer, you have rights — including the right to professional representation, the right to appeal IRS decisions, and the right to be treated fairly and professionally.
How to Reduce Your Audit Risk
- File accurate, complete returns every year
- Keep organized records for at least 7 years
- Avoid claiming excessive or unsupported deductions
- Report all income — including freelance and side income
Facing an IRS audit? Don’t face it alone. Alpha CPA LLC is here to protect you.
