Quick overview

An IRS field audit (sometimes called an “office visit” audit when performed at a taxpayer’s place of business) is the most comprehensive type of IRS examination. Unlike a correspondence audit, which is handled by mail, a field audit involves an IRS revenue agent coming to your location to review original records, interview you or your staff, and walk through business practices. The IRS describes its audit procedures and taxpayer rights in Publication 556 and on IRS.gov, which remain the primary authoritative references for the process (IRS, Pub. 556).

Typical timeline and step-by-step what to expect

  • Notice and scheduling: You’ll first receive a written notice explaining that a field audit is being scheduled. The letter will state who the agent is, what tax years are under review, and whether the meeting will be at your home, business, or the IRS office. Do not ignore this notice—response deadlines can be short. (See IRS audit notices: https://www.irs.gov/).
  • Initial visit/appointment: The revenue agent arrives and asks to meet with the taxpayer or the designated representative. Expect a walkthrough of records and a list of documents requested. The agent may ask clarifying questions and request to see supporting documents for entries on your return.
  • Document review and follow-ups: The agent reviews records on-site and may ask for additional documents later. Field audits can take weeks to months depending on complexity and availability of records.
  • Closing conference: The agent presents preliminary findings. You can accept the findings, propose changes, or request time to supply more evidence. If you disagree, you can appeal using the IRS Office of Appeals. For guidance on appeals, see our guide on how to use the appeals process: “How to Use the IRS Appeals Process to Resolve Audit Disputes.” (internal link below)
  • Final report and resolution: The audit ends with either no change, proposed changes (with tax owed, penalties, and interest), or an agreement on adjustments. If you owe tax, you’ll receive a report explaining the assessment and payment options.

Typical duration: From initial visit to final resolution, a field audit usually spans several weeks to many months for complex matters. Simple issues may close in a few weeks, but complex business audits can exceed a year.

Who usually gets a field audit?

Field audits are more common for:

  • Businesses and self-employed taxpayers (sole proprietors, landlords).
  • Taxpayers with large or unusual deductions relative to income.
  • Returns with complex items like depreciation, inventory, or large pass-through transactions.
  • Cases where the IRS needs to inspect original records or business operations (inventory, production, sales processes).
    Selection can be by computer scoring, referrals, or anomalies detected on information returns.

What auditors typically examine

Revenue agents focus on items that most affect tax liability:

  • Income reporting (unreported 1099 or W-2 items, cash receipts).
  • Deductions and credits (business expenses, charitable deductions, home office).
  • Cost of goods sold and inventory adjustments.
  • Depreciation and amortization schedules.
  • Related-party transactions and distributions.
  • Employee vs. independent contractor classifications.

Documents to gather (preparation checklist)

Start assembling a centralized audit packet before the agent arrives. Typical documents include:

  • Complete tax returns for the years under audit, including schedules.
  • Bank statements (business and personal), canceled checks, and deposit slips.
  • Receipts, invoices, and contracts for material expenses.
  • General ledger, accounting software reports, and credit card statements.
  • Payroll records, Forms W-2 and W-3, 1099s issued and received.
  • Fixed asset lists, purchase invoices, and depreciation schedules.
  • Lease agreements, loan documents, and insurance policies.
  • Evidence of business purpose for large or atypical expenses.

For a detailed list on what to send to an auditor, prepare an organized set using our internal guide “Preparing an Audit Packet: What to Send to an IRS Auditor.” This reduces back-and-forth and helps the agent complete the exam more quickly.

Day-of checklist (practical tips)

  • Designate a quiet workspace and limit interruptions.
  • Bring organized folders and a copy of the tax return under audit.
  • Have a primary point-of-contact and, if possible, a tax professional present. The IRS recognizes that taxpayers can be represented by a CPA, attorney, or enrolled agent (Form 2848).
  • Limit verbal narratives—answer questions clearly and don’t volunteer extra information beyond what’s requested.
  • Keep a contemporaneous log of questions asked, documents provided, and time spent.

If you’d like a practical day-of checklist, see our piece “Preparing for an IRS Field Audit: Day-of Checklist.”

How to work with the revenue agent

  • Be professional and organized. Agents are trained to be thorough but also adhere to procedures and taxpayer rights.
  • Provide documents as requested. If an original record can’t be produced, explain why and offer copies, affidavits, or corroborating evidence.
  • If the agent requests access to files of a third party, the IRS generally must issue a summons rather than rely on voluntary production. Stay aware of your privacy and legal rights; consult counsel if summons or third-party subpoenas are mentioned.

Representation and your rights

You have the right to representation during the audit. If you prefer not to attend, you can authorize a tax professional with Form 2848 (Power of Attorney) to represent you. The IRS also provides a Taxpayer Bill of Rights; key rights include being informed, represented, and having fairness and confidentiality during the process (IRS.gov).

Common audit findings and how to address them

  • Unreported income: Provide bank statements, 1099s, and ledgers showing deposits and the business purpose.
  • Disallowed deductions: Trace each deduction to a receipt or contract and explain the business purpose. For home office claims, produce measurements, use logs, and evidence of exclusive business use.
  • Misfiled expenses (personal vs. business): Separate personal and business accounts going forward and provide supporting documentation that substantiates the business use.

If an adjustment is proposed, ask for the agent’s computation and the legal basis. You may be able to negotiate or present additional documentation during a closing conference.

Penalties, interest, and potential outcomes

If an audit results in additional tax owed, the IRS will calculate penalties (e.g., accuracy-related penalty) and interest from the original due date. Penalty relief may be available through reasonable cause or first-time penalty abatement programs—provide documentation that supports reasonable cause (Treasury and IRS guidance). Always confirm penalty calculations and ask for the statutory citation for any penalty assessed.

Appealing an adverse finding

If you disagree with the final audit determination, the IRS Office of Appeals is an independent organization inside the IRS that resolves disputes without litigation. You can file a formal protest for certain dollar thresholds or request an appeals conference. For step-by-step help, review our article “How to Use the IRS Appeals Process to Resolve Audit Disputes.” (internal link below) The appeals process can preserve taxpayer rights and often leads to negotiated settlements.

Common mistakes to avoid

  • Waiting to gather records only after you receive the audit letter.
  • Relying on memory instead of contemporaneous documentation.
  • Volunteering undocumented explanations or guessing figures for missing records.
  • Failing to keep copies of what you hand to the agent.

Real-world example (anonymized)

A small service business owner I advised was selected for a field audit focused on deductions and equipment purchases. Because we had built an audit packet with invoices, payment evidence, and usage logs, the agent accepted the claimed deductions after a single on-site review. The lesson: organized records and a clear business narrative materially shortened the audit.

When to bring in outside help

Bring in a CPA, enrolled agent, or tax attorney if:

  • The audit involves complex tax issues (S-corp allocations, international transactions, large depreciation claims).
  • The IRS is proposing significant penalties or criminal exposure is suggested (rare, but a sign to engage counsel).
  • You prefer technical negotiation and appeals handled by an experienced practitioner.

Final practical checklist

  1. Read the audit notice and mark deadlines.
  2. Assemble a clearly labeled audit packet (returns, ledgers, receipts).
  3. Appoint a single contact and consider representation (Form 2848).
  4. Keep meticulous notes of every meeting and document transfer.
  5. If you disagree with findings, request the closing conference and consider Appeals.

Additional resources and authoritative references

Internal guides on this site that can help you prepare:

Professional disclaimer: This article is educational and does not constitute tax, legal, or financial advice. Your situation may require specific professional guidance—consult a licensed CPA, enrolled agent, or tax attorney for individualized advice.

Author background: I’m a CPA and financial strategist with more than 15 years’ experience preparing clients for IRS examinations. In my practice, well-organized records and early professional engagement consistently improve audit outcomes.