Why a packet matters

A well-built audit response packet reduces confusion, shortens the audit timeline, and lowers the chance of unnecessary adjustments. In my practice as a CPA with 15+ years helping clients through audits, organized responses often close cases faster and limit penalties. For IRS expectations on correspondence and field audits, see the IRS guidance on audits and recordkeeping (IRS: Audits; IRS: Recordkeeping).

Quick checklist (must-haves)

  • Cover letter summarizing the packet and contact information.
  • Table of contents with numbered tabs or bookmarked PDF sections.
  • Copies of the tax return(s) being examined (highlight relevant lines).
  • Requested supporting documentation: receipts, invoices, bank and credit card statements, canceled checks.
  • Reconciliation spreadsheets tying records to return amounts.
  • Explanatory notes for anomalies (dates, amounts, classification choices).
  • Proof of delivery (certified mail receipt or e-delivery confirmation).
  • Power of Attorney (Form 2848) if an authorized representative handles the audit (IRS: Form 2848).

Suggested packet order (one clear standard)

  1. Cover letter and contact page (include taxpayer name, EIN/SSN, tax year, auditor name, and reference number).
  2. Table of contents with tab numbers and a short map to where each item appears.
  3. Summary reconciliation (one-page snapshot showing the issue + how documents support it).
  4. Copies of filed return(s) (highlight inspected lines).
  5. Supporting documents grouped by line item or issue (in chronological suborder).
  6. Explanatory notes and statutory citations or professional opinions, if applicable.
  7. Communications log and delivery proof.

Cover letter template (short)

[Taxpayer name / Business name]
[Taxpayer ID / EIN]
[Tax year(s)]
[Examiner name and contact]

Subject: Response to Notice [Notice number] — Documents enclosed

We enclose the following documents in response to your notice dated [date]. Please see the enclosed table of contents for locations of requested items. If you need further clarification or additional documents, contact [name] at [phone/email].

Respectfully,
[Prepared by / Signature]

Explanatory note example (concise)

Issue: Large charitable contribution claimed on Schedule A

Explanation: Donor contributed appreciated securities on 9/12/2023. Enclosed: broker confirmation (Tab 4), Form 8283 completed and signed (Tab 5), and appraisal summary for non-cash gift over $5,000 (Tab 6). Reconciliation: Schedule A line 16 = $12,450 (see reconciliation, Tab 3).

Digital vs. physical delivery

  • Correspondence audits often allow mailed packets or secure e-filing per the auditor’s instructions; preserve a searchable PDF copy with bookmarks and a hyperlinked table of contents.
  • For large physical packets, use labeled dividers, 3-ring binders, and Bates-stamp pages for easy reference.
  • Always keep an exact duplicate and document chain of custody (certified mail receipt or courier tracking).

Handling missing documents

If an original document is lost, provide a clear audit trail: bank statements, payment confirmations, duplicates from vendors, affidavits, or statements explaining efforts to locate originals. Note that the IRS accepts reasonable reconstruction when originals aren’t available—document your reconstruction steps and supporting evidence (IRS: Recordkeeping).

When to involve a professional

Hire a tax professional when: potential tax liability or penalties are large, the issue involves complex business transactions, multiple tax years are affected, or you’re uncomfortable communicating directly with an auditor. If you plan to appoint representation, file Form 2848 early (see FinHelp’s guide on using a power of attorney: Using a Power of Attorney (Form 2848) During an Audit).

Practical tips to speed review

  • Start with a one-page executive summary that states the issue and the resolution you’re providing.
  • Use consistent file names and tab labels (e.g., 3-1BankStmt2023-03).
  • Include a reconciliation worksheet that ties the source documents to the tax return figures.
  • Limit attachments to relevant documents — auditors prefer organized, relevant evidence over bulk.
  • For business audits, consider using the audit binder approach described in our guide to Preparing an Audit Binder.

Common pitfalls to avoid

  • Sending disorganized scans without an index; the auditor may request resubmission.
  • Overloading the packet with unrelated documents.
  • Failing to highlight or cross-reference documents to the specific return line being questioned.

Timelines and response expectations

Always respond by the date on the IRS notice. Many correspondence audits request a reply within 30 days, but deadlines vary; check your notice carefully and document when you mailed or transmitted the packet. Missing deadlines can lead to default adjustments.

Authoritative sources and further reading

Professional disclaimer

This article provides general information and examples based on professional experience and public IRS guidance. It is not legal or tax advice for your specific situation. Consult a qualified tax professional for advice tailored to your facts and to review any documents before submission.

If you’d like, I can provide a downloadable one-page cover letter and a sample reconciliation spreadsheet to adapt for your audit packet.