Quick overview

Field audits and correspondence audits are the two most common ways the IRS examines returns. A field audit typically involves an IRS agent visiting a taxpayer’s home, business, or accountant’s office to review records in person. A correspondence audit is handled by mail or secure message and focuses on specific issues or missing documentation.

Both audit types aim to verify tax return accuracy, but they differ in scope, timeline, preparation, and taxpayer interaction.

(Author note: In my 15+ years helping clients through audits, I’ve found that understanding which type you’re facing is half the battle — it determines how you assemble records, whether you should be present, and whether you should hire representation.)

How each audit type works

  • Field audits

  • Scope: Broad. The agent can request to see multiple years of returns, business records, ledgers, and supporting documentation. They may interview owners, employees, or your tax preparer.

  • Location: Conducted at the taxpayer’s business, home, or the tax preparer’s office.

  • Duration: Can last from a few hours to several weeks depending on complexity.

  • Best for: Complex business returns, large adjustments, or suspected underreporting of income.

  • Correspondence audits

  • Scope: Narrow. The IRS asks for specific documents (for example, receipts, Forms W-2, or 1099s) related to a particular line item.

  • Location: Handled by mail or the IRS secure portal; no in-person meeting.

  • Duration: Typically resolved in a few weeks to a few months depending on response time.

  • Best for: Minor omissions, verification of deductions, income mismatches, or math errors.

Sources: IRS guidance on audits and procedures (see IRS audit overview) and the Taxpayer Bill of Rights (IRS, 2025). For more on your rights, visit the IRS Taxpayer Bill of Rights: https://www.irs.gov/taxpayer-bill-of-rights

Typical triggers and selection methods

The IRS selects returns for audit using a mix of computerized filters, third-party reports, and referrals. Common triggers include:

  • Large or unusual deductions relative to income (e.g., excessive business expenses or charitable donations).
  • Mismatches between information returns (W-2, 1099) and what was reported on your return.
  • Random statistical sampling or issues flagged by the IRS’s automated systems.
  • Related examinations: an audit of a business partner or investor can lead to an audit of related taxpayers.

Correspondence audits are often used when the issue is limited and easily verified. Field audits occur when the IRS needs to review records on site or evaluate business processes and source documentation.

For background on audit selection and sampling, see FinHelp’s explanation of how the IRS determines audit selection: https://finhelp.io/glossary/how-the-irs-determines-audit-selection-algorithms-and-criteria/

What to expect day-of (field audit) vs responding (correspondence audit)

Field audit day-of expectations:

  • Identification: The agent will present credentials and explain the scope of the visit. Ask for the audit notice and the agent’s business card.
  • Records review: Agents may request the original books, bank statements, invoices, payroll records, and electronic records. Have organized folders or a digital file ready.
  • Interviews: The agent may ask questions of the taxpayer or staff. You may politely request your tax professional be present before answering complex questions.
  • Privacy: Agents are allowed to review tax-related records; unrelated personal items should not be part of the review unless relevant.

Correspondence audit response expectations:

  • Request letter: The IRS letter will list the documents needed and a deadline (commonly 30 days). Read it carefully and follow the instructions exactly.
  • Submission: You can mail copies or use the IRS secure portal. Never send original documents unless specifically requested.
  • Follow-up: If the IRS needs clarification they’ll send another notice. Keep all response proof (certified mail receipts or electronic confirmation).

For a step-by-step field-audit day guide, see: What Happens at a Field Audit: Preparation and Day-of Procedures: https://finhelp.io/glossary/what-happens-at-a-field-audit-preparation-and-day-of-procedures/

For a correspondence audit checklist and sample response letter, see: Preparing for a Correspondence Audit: Document Checklist and Sample Response Letter: https://finhelp.io/glossary/preparing-for-a-correspondence-audit-document-checklist-and-sample-response-letter/

Practical preparation checklist

For both audit types, start with a complete, organized file. Use these steps:

  • Collect records: receipts, bank statements, invoices, canceled checks, ledgers, contracts, payroll reports, and relevant electronic records. The IRS accepts electronic documentation when clearly legible (IRS guidance).
  • Create a timeline: Map transactions to the tax return line items in question. Label documents with dates and explanations.
  • Summarize: Provide a one- or two-page summary that ties the documents to the tax return — auditors appreciate clarity.
  • Keep originals safe: Send copies to the IRS; keep originals at your office in case follow-up is needed.
  • Consult a professional: For field audits or high-dollar items, engage a CPA, EA, or tax attorney. If you need someone to represent you before the IRS, Form 2848 (Power of Attorney) is commonly used to authorize representation.

See FinHelp’s documentation checklist for audit prep: How to Prepare for an IRS Audit: Documentation Checklist: https://finhelp.io/glossary/how-to-prepare-for-an-irs-audit-documentation-checklist/

Communication and representation

  • Respond promptly: Most IRS notices include a response deadline. If you need more time, contact the IRS and request an extension in writing.
  • Right to representation: You can have a CPA, enrolled agent (EA), or tax attorney represent you. In my practice, having a representative present during field audits reduces the chance of misstatements and speeds resolution.
  • Keep records of communication: Save copies of letters, emails, portal confirmations, and notes from phone calls (include date, time, agent name, and summary).

Potential outcomes and timelines

  • Correspondence audit: Often resolved quickly when documentation is straightforward. If the IRS accepts your documents, they’ll notify you. If adjustments are proposed, you’ll receive a notice explaining the change and any balance due or refund change.
  • Field audit: Can result in no change, proposed adjustments, penalties, or referrals for further examination. Field audits may also lead to additional years being examined.

If you disagree with proposed adjustments, you can request an administrative appeal within the IRS Appeals Office. For guidance on appealing audit determinations, FinHelp’s article on appeals provides practical steps: How to Appeal an Unfavorable Audit Determination: https://finhelp.io/glossary/how-to-appeal-an-unfavorable-audit-determination/

Common mistakes to avoid

  • Ignoring notices: Silence can lead to default assessments and collection action.
  • Sending disorganized documents: This lengthens the process and increases the chance of an unfavorable outcome.
  • Admitting fault without review: Don’t concede errors in an interview or letter until records are reviewed or your advisor is present.
  • Sending originals unnecessarily: Keep originals and send copies unless the IRS explicitly requests originals.

Real-world examples (anonymized)

  • Small business field audit: A retail owner faced a one-week field audit after the IRS identified inconsistent cash receipts. Because records were organized and the owner had a CPA present, most items were clarified; only one modest adjustment remained.
  • Freelancer correspondence audit: A freelancer received a letter asking for receipts for a claimed home office deduction. The freelancer provided a clear floor-plan, receipts, and a usage log and the matter was closed without change.

Your rights and final tips

You have rights under the Taxpayer Bill of Rights: to be informed, represented, heard, and to appeal (IRS, 2025). Exercise them: ask for documentation of the agent’s authority, request a reasonable time to assemble records, and involve a trusted tax professional for complex issues.

Final practical tips:

  • Start preparing immediately after you receive an audit notice.
  • Provide clear, labeled documentation that links directly to return items under review.
  • Use professional representation for field audits and large-dollar adjustments.

Professional disclaimer: This article is educational and not individualized tax advice. For guidance specific to your situation, consult a licensed CPA, enrolled agent, or tax attorney. See official IRS resources for current procedures: https://www.irs.gov

Authoritative references

Internal FinHelp resources referenced above:

If you’d like, I can also provide a printable checklist or a sample cover letter for a correspondence audit response.