Why a representation package matters

An IRS audit is an information-driven examination. A well-assembled representation package transforms disparate records into a coherent narrative that proves compliance, answers likely examiner questions, and narrows the issue set the IRS needs to examine. In my 15 years helping clients through audits, cases with a clear index, short explanatory memos, and properly authenticated supporting documents resolve faster and attract fewer follow-up requests.

Authoritative guidance from the IRS stresses the importance of representation and proper documentation. See IRS guidance on audit representatives and examinations (IRS, Publications 556 and audit representative resources) for details: https://www.irs.gov/publications/p556 and https://www.irs.gov/businesses/small-businesses-self-employed/audit-representatives.

What to include: the core components

Assemble items in this order to create a standards-based package that auditors can process quickly.

  1. Cover letter (1 page)
  • Short identification: taxpayer name, SSN/EIN (last four digits only when transmitting electronically), tax year under examination, contact name and phone number.
  • Statement of authority: name of representative and evidence of authorization (Form 2848) if applicable.
  • One-paragraph summary of the taxpayer’s position and the items included in the package.
  • Request for preferred next steps (e.g., ask for an item-by-item acceptance or a meeting date).
  1. Table of contents and tabbed index
  • Numbered tabs and a hyperlinked PDF bookmarks file if sending electronically.
  • Each tab should list document filenames and a one-line description.
  1. Executive memo / issue summaries (2–3 pages per disputed issue)
  • Issue name and the relevant tax code or regulation citation (brief).
  • Short factual timeline and documentary evidence list.
  • Summary conclusion and requested resolution (e.g., accept deduction in full).
  1. Supporting primary documents (organized by issue)
  • Tax returns for the years under audit and the two adjacent years (as available).
  • Income evidence: W-2s, 1099s, sales journals, bank deposits reconciled to reported income.
  • Expense evidence: receipts, invoices, canceled checks, credit card statements, contracts, payroll records.
  • Asset documentation: purchase contracts, closing statements, depreciation schedules.
  • Third-party statements: vendor invoices, customer payment confirmations, lender statements.
  1. Reconciliations and workpapers
  • Bank reconciliations tying deposits to reported income.
  • Mileage logs, home-office calculations (show method used), and amortization/depreciation worksheets.
  • Excel schedules with live formulas saved to PDF; attach original spreadsheets on a separate USB/CD (if requested).
  1. Correspondence and prior IRS notices
  • Copies of any IRS letters, prior agreements, closing letters, or proposed adjustments.
  1. Authenticating documents and chain-of-custody notes
  • Notation of originals reviewed, where they are stored, and whether copies are certified (if necessary).
  1. Authority and representation forms
  • Form 2848 Power of Attorney (if a representative will speak for the taxpayer).
  • Form 8821 (Tax Information Authorization) if limited access is granted.
  1. Optional: expert reports and third-party evidence
  • Appraisals, market-rate analyses, or consultant reports that support valuations or allocations.

How to format the package (practical file and delivery standards)

  • Use clear, consistent file names (e.g., 2022S-CorpReturn.pdf, 2022BankRecon_Jan-Dec.xlsx).
  • Convert everything to searchable PDF. OCR scanned pages to make keyword searches possible.
  • Keep electronic bookmarks that mirror your physical tabs.
  • Label each page with a footer stating the taxpayer name and page number (useful if pages get separated).
  • When mailing, send via certified mail with return receipt or use a secure e-file/portal method if the IRS provides one. The IRS may also accept fax or secure uploads when instructed in a notice—follow the specific notice instructions (IRS: Responding to a notice or letter).

Authoritative note: always follow the instructions in the IRS notice/letter you received; deadlines and submission methods vary (see https://www.irs.gov/individuals/responding-to-a-notice-or-letter-from-the-irs).

Preparing the narrative: what to say and how much

An auditor has limited time. Your narrative should:

  • Open with a concise factual timeline (dates, amounts, counterparties).
  • Explain the business purpose for disputed items (why an expense is ordinary and necessary, how a method was chosen, etc.).
  • Cite specific documents and point to exact pages/tab numbers.
  • Avoid legal argumentation unless drafted by counsel; focus on facts and verifiable records.

Sample opening paragraph for a cover memo:
“For tax year 2022, the taxpayer reported $45,000 in subcontractor expenses. Attached at Tab 3 are the underlying invoices (pages 3–8), the signed contracts (pages 9–11), and bank transfers that correspond to each payment (pages 12–14). The enclosed ledger reconciles each debit to the reported expense.”

Common mistakes to avoid

  • Sending an unindexed pile of documents without a guide—forces the auditor to dig and increases follow-up requests.
  • Missing critical reconciliations—show how bank activity ties to reported income/expenses.
  • Overloading with unnecessary raw data—include summary worksheets that lead the reviewer to the most relevant pages.
  • Redacting improperly—don’t redact supporting data that an auditor needs unless legally required; if you must redact (SSNs, unrelated third-party info), explain why.

Handling representation and authority

If you or your firm will represent the taxpayer, include a completed Form 2848 and attach identification for the representative. The IRS explains representation rights and responsibilities here: https://www.irs.gov/businesses/small-businesses-self-employed/audit-representatives. If you’re undecided whether to hire someone, see our guidance on when to hire a tax attorney versus a CPA: “Audit Representation: When to Hire a Tax Attorney vs. CPA” (https://finhelp.io/glossary/audit-representation-when-to-hire-a-tax-attorney-vs-cpa/).

Interlink: for help with the document list, see “Preparing for an IRS Income Tax Audit: Documents to Gather” (https://finhelp.io/glossary/preparing-for-an-irs-income-tax-audit-documents-to-gather/).

Timelines and deadlines

  • Respond within any deadline listed on the IRS notice. If you need more time, request it in writing and explain why you need an extension.
  • If you receive a 30-day letter or CP2000-type notice, follow the precise response steps—failure to respond can lead to default adjustments. See our short guide “What to Do Within 30 Days of Any IRS Notice” for practical next steps: https://finhelp.io/glossary/what-to-do-within-30-days-of-any-irs-notice/.

When to involve experts

  • Valuation disputes: use a certified appraiser and include a signed engagement letter and report.
  • Complex allocation or cost-basis issues: attach an accountant-prepared schedule and references to authoritative tax literature.
  • Large or potentially criminal-exposure cases: retain a tax attorney immediately; attorney-client privilege may be available for certain communications when counsel is engaged early.

Checklist: final pre-submission quality control

  • Have a colleague review the package for clarity and completeness.
  • Confirm that all referenced pages actually appear where the memo says they do.
  • Verify contact information and signature pages.
  • Keep a complete copy of everything you submit and note the delivery method and date.

After submission: what to expect

  • The IRS may accept the package and close the issue, ask follow-up questions, request originals, or propose an adjustment. Expect at least one round of clarification if documents raise new questions.
  • If you disagree with an adjustment, you can pursue the appeal rights described in Publication 556 and related IRS appeals procedures (https://www.irs.gov/publications/p556).

Real-world tips from practice

  • Use color tabs and call-out stickers for high-priority documents.
  • Create a one-page “audit quick view” that an agent can read in under two minutes describing the taxpayer, disputed dollar amounts, and the conclusion you want.
  • When possible, preempt questions: if an expense could look personal, include a short affidavit or client note explaining business use and attach corroborating evidence.

Professional disclaimer

This article is educational and current as of 2025. It is not legal or tax advice. For advice tailored to your facts and circumstances, consult a qualified tax professional or attorney. Official IRS guidance discussed here includes Publication 556 and the IRS audit representative page: https://www.irs.gov/publications/p556 and https://www.irs.gov/businesses/small-businesses-self-employed/audit-representatives.

Quick resources

If you’d like, I can turn the checklist into a downloadable, fillable PDF or produce a sample cover memo tailored to a specific audit issue (income, deductions, or basis) — say which issue and tax year, and I’ll draft it.