Background and why preparation matters

An IRS interview or examination is often the most stressful interaction many taxpayers face. From my 15 years working as a financial educator and advisor, I’ve seen the same pattern: taxpayers who arrive organized and who understand the process resolve cases faster and with fewer surprises. The IRS has three common exam channels: correspondence (mail), office (in person at an IRS office), and field (in-person at the taxpayer’s home, business, or preparer). In recent years the IRS has shifted resources to data-matching and targeted reviews, but the fundamentals of documentation, timeliness, and professional representation remain unchanged (IRS: Understanding IRS Examinations — https://www.irs.gov/businesses/small-businesses-self-employed/understanding-irs-examinations).

How the IRS selects returns and what to expect

The IRS selects returns for examination using a mix of automated data matching, information returns (W-2s, 1099s), third-party reporting, and weighted-scoring systems. Common triggers include large or unusual deductions, mismatches between forms, or random selection (IRS: What to Expect if You Are Selected for an Audit — https://www.irs.gov/newsroom/what-to-expect-if-you-are-selected-for-an-audit).

What to expect by type:

  • Correspondence audit: The IRS requests limited documents by mail and expects a written response. This is the most common and usually the quickest type.
  • Office audit: You or your representative meet at an IRS office to present records and answer questions.
  • Field audit: An IRS examiner visits the taxpayer’s location to inspect books, records, and operations. Field audits are generally limited to more complex issues.

If the IRS contacts you, read the letter carefully. Notices state the reason for contact, what documents are needed, and a deadline for response. Never ignore notices — delays can increase penalties and enforcement activity.

Immediate steps on receiving a notice

  1. Read the notice slowly and document dates and contact information. Notices include an audit ID and an exam phone number.
  2. Confirm the notice is genuine. Scammers mimic IRS letters — contact the IRS directly via official IRS.gov channels if you’re unsure.
  3. Collect the specific documents requested. Don’t send extra files unless needed; send clear, organized copies, not originals.
  4. Meet deadlines. If you can’t meet the deadline, request an extension in writing (explain why and give a realistic date).

Organizing documentation: a practical checklist

  • Tax returns for the years under review.
  • Income records: W-2s, 1099s, bank statements, invoices, settlement statements.
  • Expense records: receipts, canceled checks, vendor invoices, mileage logs.
  • Supporting schedules: depreciation records, basis calculations, K-1s.
  • Accounting files: general ledger or profit & loss statements showing how figures were derived.
  • Third-party verification: Forms 1098/1099, bank deposit slips, contracts.

Tip: Prepare a single PDF or clearly labeled binder with an index page. Label documents so the examiner can follow your logic quickly. See our how-to guide on gathering records: “How to Gather Records for an IRS Audit: A Step-by-Step Guide” (link).

What to say (and what not to say) during an interview

  • Say: Clear, concise facts; point to the document that supports each claim.
  • Don’t volunteer extra information. Answer the question asked. Extra details can create new lines of inquiry.
  • If you don’t know, say so — and offer to provide supporting records.
  • Avoid informal agreements. If the examiner proposes an adjustment, ask for it in writing and consult your advisor before agreeing to sign anything.

If you prefer not to speak with IRS agents yourself, you can appoint a representative (CPA, EA, attorney) using IRS Form 2848 (Power of Attorney). Representation often improves negotiation and preserves taxpayer rights.

Legal windows and common deadlines

  • Statute of limitations: Generally 3 years from the due date or filing date (whichever is later). If the IRS alleges a substantial omission of income (25% or more), it can extend to 6 years. There’s no limit for fraud or if no return is filed (IRS: How Long Should I Keep Records/About Recordkeeping — https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records).
  • Respond promptly to notices. Missing deadlines can close off appeal opportunities and increase penalties.

Common mistakes and misconceptions

  • Mistake: Overloading the examiner with unorganized boxes of records. Result: examiner may miss key items, delaying resolution.
  • Mistake: Not seeking representation early. A qualified representative can handle communications, protect rights, and often speed resolution.
  • Misconception: Audits always mean you did something wrong. Many audits are informational or result in no change.

Real-world examples (anonymized)

  • Freelance designer: By preparing a two-page summary mapping reported income to 1099s and bank deposits and including categorized receipts, she resolved a correspondence audit with no change.
  • Small business field audit: A restaurant owner who kept payroll ledgers, supplier invoices, and reconciled bank statements avoided payroll tax adjustments. The examiner appreciated the organized packet; the audit closed in weeks rather than months.

De-escalation and resolution options

  • If you disagree with proposed adjustments, don’t sign an agreement immediately. Ask for the examiner’s report in writing and use your right to appeal.
  • Appeals: If you disagree after the exam, you can request an administrative appeal within the IRS Office of Appeals. See our piece on audit appeals: “Tax Audit Appeals: How to Prepare for the Appeals Conference” (link).

Professional tips and strategies

  1. Assemble a one-page summary: year, issue, dollar amount, explanation, and where the evidence lives in your packet.
  2. Use clear labeling and a table of contents for binders or PDFs.
  3. Keep a running audit folder for at least six years for business records and three years for personal tax files.
  4. If you have electronic records, provide searchable PDFs and include a contact person who can walk the examiner through file structure.
  5. Maintain a mileage log and contemporaneous expense records — these are frequent audit targets.
  6. Know the Taxpayer Bill of Rights: you have the right to representation, appeal, and courteous treatment (IRS: Taxpayer Bill of Rights — https://www.irs.gov/taxpayer-bill-of-rights).

Sample preparation timeline

  • Day 1–3 after notice: Read notice, validate identity, contact a representative if needed.
  • Day 4–10: Gather and index documents requested; prepare the one-page summary.
  • Day 11–14: Review documents with your advisor; prepare answers to likely questions.
  • Prior to interview: Print copies for the examiner and keep an original set for your files.

Helpful internal resources

  • Correspondence vs Field Audits: what to expect and how to prepare (link).
  • Preparing for an IRS Office Audit: Checklist (link).

Frequently Asked Questions

  • Can the IRS come to my home without warning? Generally no — field audits are scheduled. If someone shows up claiming to be an IRS agent, verify their identity and call the IRS before allowing entry.
  • Do I have to sign audit adjustments on the spot? No. You can request the changes in writing and consult your representative.
  • How long will this take? Many correspondence audits finish in weeks; complex field audits can last months. Timely, organized responses shorten the timeline.

Professional disclaimer

This article is educational and general in nature and does not constitute legal, tax, or accounting advice. For personal guidance, consult a licensed tax professional, enrolled agent, CPA, or tax attorney who can review your facts and represent you. If you choose to appoint a representative, use IRS Form 2848 (Power of Attorney).

Authoritative sources and further reading

If you would like a printable checklist or help preparing a document packet, see our step-by-step guide on gathering records: “How to Gather Records for an IRS Audit: A Step-by-Step Guide” (link).