Preparing for a Field Audit: Documentation Checklist

Overview

A field audit is an on-site, in-person review of your tax records by an IRS agent. Compared with correspondence or office audits, agents expect to see original documents and reconciliations. Preparing a complete, well-organized packet of documents reduces delays and lowers the chance of misunderstandings. This checklist covers the core documents the IRS routinely requests for individual and small-business field audits, timelines for assembly, organization tips, and sample scenarios.

Key documents to assemble (core checklist)

• Tax returns and supporting schedules: Copies of the tax return(s) under audit and at least 2–3 prior years’ returns. Include schedules (Schedule C, Schedule E, corporate or partnership returns, K-1s).
• Identification and audit notice: The IRS appointment letter and agent ID. Keep a copy of the mailed notice and any correspondence.
• Accounting records: General ledger, trial balance, journal entries, and month-by-month reconciliations. Export these from your accounting software (QuickBooks, Xero, etc.).
• Bank records: Bank statements, canceled checks (or check images), deposit slips, and bank reconciliations for the period under audit.
• Credit/debit card statements: Cards used for business or deductible expenses; highlight business transactions.
• Sales and receipts records: Sales invoices, cash register tapes, POS reports, and summaries by day or location.
• Vendor invoices and bills: All vendor invoices, receipts for purchases, and supporting documentation for large or unusual expenses.
• Payroll documentation: Payroll registers, Form 941 or 944 filings, W-2s, payroll tax deposits, and time sheets.
• Contracts and legal documents: leases, partnership or operating agreements, loan documents, purchase agreements, and settlement statements.
• Asset and depreciation records: Purchase invoices, closing statements, Date placed in service, depreciation schedules, and Form 4562 if you claimed depreciation.
• Inventory records: Year-end inventory counts, valuation methods, and supporting purchase records.
• Mileage and travel logs: Dated mileage logs with purpose, vehicle maintenance records, and travel itineraries and receipts.
• Meals, entertainment, and gift records: Receipts plus contemporaneous notes stating business purpose and attendees.
• Home office documentation: Floor plan with square footage, mortgage or rent records, utility bills, and Form 8829 or other calculation support if claiming a home-office deduction.
• 1099s, W-2s and third‑party reporting: All Forms 1099-NEC, 1099-MISC, 1099-K and W-2s that relate to the tax year under audit.
• Prior audit files and correspondence: If you had earlier audits, include audit reports, closing agreements, or IRS adjustments.
• Electronic records and backups: Exported spreadsheets, PDFs, email threads supporting transactions, and a statement of where originals/backups are stored.
• Power of attorney and engagement letter: Signed Form 2848 (if a representative will appear) and any engagement letter with your CPA or attorney.

Specific items by situation (examples)

• Home business/sole proprietor: Bank statements segregated by business vs. personal; invoices to customers; proof of client work (contracts, correspondence); business insurance; canceled checks for business expenses.
• Rental property: Leases, tenant receipts, repair invoices, Form 1098 mortgage interest statements, property tax bills, depreciation schedules, and insurance claims.
• Cash-heavy businesses: Daily sales summaries, deposit slips, POS reports, bank deposit slips, and inventory shrinkage records.
• Vehicle expenses: Mileage log (date, miles, purpose), odometer readings, repair and fuel receipts, lease agreements or purchase documents.

How to organize documents for a field audit

• Make an index and a production cover sheet: Start with a short index (tab or PDF bookmarks) listing documents and date ranges. Label folders by topic and tax year.
• Use a prioritized delivery: Agents appreciate getting core items first—returns, bank statements, ledgers, and reconciliations—then deeper support.
• Provide reconciliations: Don’t just hand raw bank statements—include a one-page bank-reconciliation that ties the bank activity to the general ledger.
• Highlight key transactions: Use sticky notes or PDF annotations to call out large, unusual, or recurring items under question.
• Keep originals accessible: For employers or businesses, originals may be requested. Have digital copies but store originals safely.
• Create an explanations folder: Short memos that explain accounting methods, unusual transactions, or one-off events can prevent lengthy back-and-forth.

Timelines and realistic expectations

• Immediate (day 0–3): Collect the IRS notice, ID, tax returns, photocopies of identification, and Form 2848 if using representation.
• Short-term (day 3–7): Pull bank statements, canceled checks, credit-card statements, sales journals, and payroll summaries.
• Medium-term (day 7–14): Compile vendor invoices, detailed reconciliations, inventory counts, and supporting contracts.
• Ongoing: Be prepared to produce additional items after the agent’s initial review. Keep a single point of contact and track what you provided and when.

Record retention and statute of limitations

• General rule: Keep records for at least three years after the date you filed the return or two years from the date the tax was paid, whichever is later.
• When to keep longer: Keep records for six years if you omitted more than 25% of your gross income and indefinitely if fraud or false returns are suspected. For property, keep documents until the period of limitations expires for the year you dispose of the asset.
• Source: IRS guidance on recordkeeping explains these timelines and gives examples — see IRS Recordkeeping for Businesses and Self-Employed (https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping).

Practical tips to reduce stress and risk

• Don’t volunteer extra information: Answer the request, provide the documents, and avoid offering unnecessary commentary that could expand the scope.
• Keep a log of communications: Note agent name, badge number, dates, and what was requested and delivered.
• Scan and back up everything: Keep both paper and digital copies. If you bring originals, provide copies to the agent and retain originals.
• Use a representative when appropriate: If the issues are complex (large adjustments, potential penalties, or criminal concerns), engage a CPA, enrolled agent, or tax attorney. If a representative attends, file Form 2848 in advance.
• Prepare concise summaries: One-page summaries of accounting methods, major transactions, or the business model help the agent understand your records quickly.

What agents commonly ask for first

Agents conducting field audits often request these items up front:

• Federal and state tax returns for the years under audit and recent prior years
• Bank statements and canceled checks
• General ledger and trial balance
• Sales records (POS, invoices)
• Payroll registers and tax deposits

When to get professional help

• If potential adjustments exceed a few thousand dollars, or if the audit involves related-party transactions, offshore accounts, or allegations of fraud, hire a qualified tax professional.
• A professional can limit contact with the IRS, prepare responses, negotiate penalties, and, if needed, request appeals.

Interlinked resources on FinHelp

• What to Expect in a Field Audit: https://finhelp.io/glossary/what-to-expect-in-a-field-audit/
• How to prepare for an IRS audit: https://finhelp.io/glossary/how-to-prepare-for-an-irs-audit/
• Types of Tax Audits (Correspondence, Office, Field): https://finhelp.io/glossary/types-of-tax-audits-correspondence-office-field/
• Your Rights During a Tax Audit: https://finhelp.io/glossary/your-rights-during-a-tax-audit/
• Statute of Limitations on Audits: https://finhelp.io/glossary/statute-of-limitations-on-audits/

External authority

For official guidance on how long to keep records and what to retain, see the IRS recordkeeping page: https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping

Sample checklist (quick reference)

1. Tax return(s) under audit + prior 2–3 years
2. IRS appointment letter and agent ID
3. Bank statements & reconciliations
4. General ledger and trial balance
5. Sales invoices, receipts, POS reports
6. Vendor invoices and canceled checks
7. Payroll registers, W-2s, 941s
8. Asset purchase docs & depreciation schedules
9. Lease agreements, loan docs, contracts
10. Mileage logs, travel receipts, meal receipts
11. 1099s and third-party reporting
12. Power of attorney (Form 2848) if represented

Conclusion

A successful field audit starts with organization. Assemble returns, bank and accounting records, reconciliations, and clear explanations early. Keep copies, document what you hand over, and consult a tax professional if the audit covers complex issues or significant adjustments. For step-by-step guidance on the audit process, see our related articles linked above and review IRS recordkeeping guidance at the link provided.