Background and authority

The IRS has broad authority to examine tax returns and request supporting documents under the Internal Revenue Code and routine administrative procedures. The agency uses a range of examination techniques—from correspondence (mail) audits to office and field examinations—to verify items reported on a return. For recordkeeping guidance, see IRS Publication 552 (Recordkeeping) and the IRS audit/examination pages (irs.gov). In my practice working with small businesses and self‑employed clients, prompt, organized responses are the most effective way to resolve examinations with minimal adjustments.

How the IRS requests documents (common techniques)

  • Correspondence examinations: The IRS sends a letter or notice listing specific documents it wants. These are the most common requests and often begin an audit.
  • Office audits: You or your representative bring documents to an IRS office appointment.
  • Field audits: An IRS agent visits your business or home to review records on site.
  • Automated/data‑matching leads: The IRS uses third‑party data (W‑2s, 1099s, bank reports) to identify mismatches and then issues document requests.

Typical documents requested

  • Bank and credit card statements
  • W‑2s, 1099s, K‑1s and supporting schedules
  • Receipts, invoices, and cancelled checks for business expenses
  • Contracts, leases, and mileage logs
  • Accounting ledgers or bookkeeping exports

Step‑by‑step response strategy

  1. Read the notice carefully: Note the exact items requested, the submission method, and the deadline. The notice will state whether originals are required.
  2. Don’t send originals unless the notice explicitly asks for them. Provide clear, legible copies and keep originals organized and separate.
  3. Assemble a concise index or cover letter that maps each requested item to the documents you’re submitting. This reduces back‑and‑forth. Include your taxpayer ID and the IRS notice number on every page.
  4. Use the format the IRS asks for (paper, fax, or secure electronic upload). Follow the notice instructions exactly. When in doubt, attach a short cover letter explaining any differences.
  5. Document how you submitted materials: use certified mail with return receipt, preserve courier tracking, or save confirmation screenshots for online uploads.
  6. If you need more time, request an extension in writing before the deadline and explain why. The IRS may grant limited extra time.
  7. If uncertain about technical issues, consult or retain a CPA, enrolled agent, or tax attorney and file Form 2848 (Power of Attorney) so your representative can communicate directly with the IRS (IRS Form 2848: https://www.irs.gov/forms-pubs/about-form-2848).

Practical examples

  • Example A: A self‑employed taxpayer received a correspondence request for 12 months of bank statements to substantiate gross receipts. By providing a chronological bank record, a summarized deposits worksheet, and receipts for large deposits, the issue was resolved without proposed changes.
  • Example B: A small business owner prepared a compact audit package before an office appointment—organized by tax return line item with a one‑page index—and the agent closed the audit after a short in‑person review. For guidance on assembling a professional audit package, see this FinHelp guide on preparing a professional binder for an IRS office audit (How to Prepare a Professional Binder for an IRS Office Audit: https://finhelp.io/glossary/how-to-prepare-a-professional-binder-for-an-irs-office-audit/).

Who is affected

All taxpayers can receive document requests: individuals, freelancers, landlords, corporations, S corps, and partnerships. Freelancers, marketplace sellers, and small businesses often receive requests tied to deductions, income reporting, or credits. Maintaining consistent recordkeeping reduces the chance a routine inquiry becomes a prolonged examination. See FinHelp resources on recordkeeping best practices (Recordkeeping Best Practices to Survive an IRS Audit: https://finhelp.io/glossary/recordkeeping-best-practices-to-survive-an-irs-audit/).

Common mistakes to avoid

  • Sending original documents unnecessarily.
  • Failing to include a clear index or cover letter linking items to the notice.
  • Waiting until the last minute; failing to preserve proof of submission.
  • Over‑explaining or volunteering unrelated documents—stick to what’s requested.

Retention table (typical guidance — confirm for your situation)

Document Type Purpose Typical retention guideline
Bank and credit card statements Income substantiation, deposits Keep at least 3 years (longer if tied to unreported income)
W‑2s and 1099s Wage and nonemployee compensation reporting Keep for 3–7 years with supporting return records
Business expense receipts/invoices Support deductions Keep for at least 3 years; keep originals for items with long‑term consequences

(See IRS Publication 552 for detailed retention rules: https://www.irs.gov/publications/p552.)

When you don’t respond or disagree

If you don’t respond, the IRS can make a determination based on available records and assess additional tax, penalties, or interest. If you disagree with a proposed adjustment you can provide additional evidence or pursue administrative review. The IRS Appeals Office accepts new evidence during appeal in many cases; guidance on submitting evidence to Appeals can help (FinHelp: Navigating Appeals: How to Submit New Evidence to the IRS Appeals Office: https://finhelp.io/glossary/navigating-appeals-how-to-submit-new-evidence-to-the-irs-appeals-office/).

Practical tips I use with clients

  • Keep a running, dated index of records for each tax year.
  • Scan and store documents in PDF with searchable filenames (yeartypevendor.pdf).
  • Prepare a one‑page summary tying large items to tax return lines.
  • If a request seems excessive or unclear, involve a tax professional before responding.

Frequently asked items

  • Extensions: The IRS sometimes grants short extensions when requested before the deadline; ask in writing and document the request.
  • Originals: Only send originals when explicitly requested; otherwise provide copies and keep originals safe.

Disclaimer

This article is educational and does not replace personalized tax or legal advice. For specific guidance on an IRS notice or complex situations, consult a qualified tax professional or attorney.

Authoritative sources

Internal resources

Final note: Respond carefully, keep records of every transmission, and consult a professional when the tax exposure is material.