Quick overview
An IRS compliance check is a targeted examination the IRS uses to verify specific items on a tax return. Most compliance checks are civil and routine — not criminal investigations — and many are resolved by mail once documentation is provided (IRS guidance: “What to Expect”).
Types of compliance checks
- Correspondence (by mail): The most common. The IRS sends a letter asking for specific documents or clarifications. Responding promptly often resolves the issue. (See our guide on How to Respond to a Tax Audit by Mail: Templates and Timing)
- Office audit: You meet an agent at an IRS office and present records in person. Prepare a concise packet and organized copies. (Related: How to Prepare for an IRS Office Audit: Steps to Take Before the Meeting)
- Field audit: An agent visits your home or business to review records onsite — less common and generally for larger issues.
Common triggers
- Mismatches between W-2s/1099s and reported income
- Large or unusual deductions (e.g., charitable, business) without clear support
- Mathematical errors or missing forms
- Random selection or information received from third parties
- Repeated reporting inconsistencies over years (IRS data matches and analytics)
What to expect step-by-step
- Notice arrives: Read it carefully. It will explain what year(s) and items are under review and a deadline to respond. The notice will not threaten arrest — it will ask for records or explanation. (For basic IRS steps, see IRS.gov.)
- Gather records: Collect invoices, bank statements, receipts, contracts, payroll records, or tax forms that support the items in question. Use a clear, indexed folder or binder.
- Respond on time: Most correspondence requests include a response deadline (typically 30 days). If you need more time, ask the IRS for an extension in writing.
- Review by examiner: The agent reviews the documents and either accepts them, proposes adjustments, or requests more information.
- Outcome: No change, agreed change (you accept proposed adjustments), or disagree (you can appeal through the IRS Office of Appeals).
How long will it take?
Timing varies. Many correspondence checks finish in 4–12 weeks after a full response; office or field examinations can take several months. Complex cases or cases that go to appeals take longer. The general statute of limitations for audits is three years from the return’s filing date; exceptions (e.g., substantial omission of income) can extend that period (IRS statute guidance).
Practical preparation checklist
- Get the exact notice and note the deadline.
- Pull the specific documents mentioned; do not send unnecessary records.
- Create copies and keep originals secure.
- Prepare a short cover letter explaining the documents you’re sending.
- Use IRS transcripts to reconcile amounts before responding. (See our piece on Records the IRS Wants to See During an Audit: A Practical Checklist).
When to get professional help
If the adjustment is large, the issue is complex, or the agent hints at penalties, consult a CPA, enrolled agent, or tax attorney. You can authorize a representative using Form 2848 (Power of Attorney) so they can speak to the IRS on your behalf (IRS Form 2848).
In my practice advising clients for 15+ years, quick organization and a clear packet with a short explanatory cover letter often shortens resolution time. For one independent-contractor client, supplying invoices and bank records within two weeks resolved the correspondence check with no penalty.
Common mistakes to avoid
- Ignoring the notice: This can escalate the case and add penalties.
- Over-sharing: Send only the documents requested; too many pages can slow review.
- Missing deadlines: Ask for an extension if needed.
Possible outcomes and next steps
- No change: The IRS accepts your documents and closes the file.
- Agreed adjustment: You owe additional tax, interest, and possible penalties; you can request a payment plan.
- Disagreement: File a formal protest or appeal to the IRS Office of Appeals — do this within the time limits in the proposed adjustment letter.
Frequently asked questions
- Will an IRS compliance check become a criminal investigation? Very rarely. Criminal investigations involve different procedures and are handled by IRS Criminal Investigation (CI) when fraud or intentional wrongdoing is suspected.
- Can I represent myself? Yes, but many taxpayers hire a qualified representative — especially for complex issues.
Authoritative sources
- IRS, “What to Expect During an Audit or Examination” and related pages, IRS.gov (search “IRS audits what to expect”).
- IRS Form 2848, Power of Attorney and Declaration of Representative: https://www.irs.gov/forms-pubs/about-form-2848
Internal resources
- How to Respond to a Tax Audit by Mail: Templates and Timing — https://finhelp.io/glossary/how-to-respond-to-a-tax-audit-by-mail-templates-and-timing/
- Records the IRS Wants to See During an Audit: A Practical Checklist — https://finhelp.io/glossary/records-the-irs-wants-to-see-during-an-audit-a-practical-checklist/
- How to Prepare for an IRS Office Audit: Steps to Take Before the Meeting — https://finhelp.io/glossary/how-to-prepare-for-an-irs-office-audit-steps-to-take-before-the-meeting/
Professional disclaimer
This article is educational and not individualized tax advice. For guidance specific to your situation, consult a qualified tax professional or attorney.
If you want, I can convert the checklist into a printable packet template or draft a sample cover letter for submission.
