What Happens If I Get Audited by the IRS?

Let’s walk through what happens if you get audited - and how to prepare so the process goes as smoothly as possible.

What is a Tax Audit and Why Would It Happen To You?

The IRS uses audits to double-check that tax returns are accurate. Common triggers for an audit include:

• Mathematical errors or mismatched numbers

• Large charitable deductions that seem out of sync with your income

• Missing income (like 1099s or freelance work not reported)

• Business expense write-offs that raise red flags

• Random selection — yes, sometimes it's just luck of the draw

Most audits aren’t about criminal activity—they’re about clarification.

How Will I Be Notified?

First things first: if you’re going to be audited, you will find out by an official letter in the mail. The IRS will never call, text, or email to initiate an audit. So if someone calls claiming to be the IRS and demanding immediate payment or personal info for an “audit,” that’s a scam. Real IRS audits start with a letter explaining:

• What year they’re reviewing

• What specific information they need

• How they want you to respond (mail, in person, or online)

• Your deadline to reply

Tip: Always read IRS letters carefully and completely. The notice will tell you what exactly the IRS is examining and how to respond. It will also have a deadline for your response - typically around 30 days. If you need more time to gather info, you can request an extension (the IRS often grants a 30-day extension for audits by mail if you ask in writing).

What Happens During an IRS Audit? (Step-by-Step)

Most audits for everyday taxpayers follow a fairly standard process. Here’s a step-by-step look at what to expect:

1. Audit Notice Arrives: As mentioned, you’ll get an IRS letter explaining that your return was selected for audit. It will state the tax year in question and outline the specific items under review (for example, a certain deduction or income source). The letter will also tell you whether the audit will be handled by mail or if the IRS wants an in-person meeting. (The majority of audits are done by mail, not face-to-face, so most people just correspond via letters.) At this stage, don’t jump to conclusions—sometimes the IRS only needs a couple of documents from you to clear things up.

2. Gather Your Records: Next, you’ll need to collect the documentation relevant to the items being audited. The IRS letter will list what they want to see. Depending on the reason for the audit, this might include:

• W-2s or 1099 forms

• Receipts or bank statements for deductions

• Proof of dependents

• Business expense records

• Mileage logs

This is why keeping good tax records is so important. (By law, you should hold onto the records used to prepare your return for at least three years.) 

Pro tip: Send copies of your documents, not originals, and keep the originals organized in your files. Also, organize your paperwork neatly – if something is unclear, add a brief explanation note. The easier you make it for the auditor to verify things, the smoother the process.

3. Respond by the Deadline: You usually have 30 days to respond. For a correspondence audit (by mail), you’ll mail back the requested info (using the provided address or fax number) by the deadline. For an office audit (at an IRS office) or a field audit (at your home or business), you’ll have an appointment to meet an IRS auditor and go over the records. In any case, stick to what is requested – provide the information asked for, and try not to volunteer unrelated details (too much extra information can sometimes complicate things). It’s perfectly okay to answer questions with straightforward facts and nothing more. Remember, most audits are resolved simply by sending in the proper paperwork and explanations via mail.

4. The Outcome: After the IRS has reviewed everything, they will reach a conclusion and send you the audit results. There are a few possible outcomes:

• No Change: Best case, they found all your documents in order and accepted your return as filed – meaning nothing changes and the audit is over.

• Changes Agreed: The IRS proposes some changes that you agree with. In this case, you’ll typically sign an agreement form and pay any additional tax (plus any interest or penalty if applicable)

• Changes Disagreed: The IRS proposes changes that you do not agree with. Perhaps you believe you provided sufficient proof for a deduction they want to disallow. You have the right to dispute the findings. You can request a meeting with an IRS supervisor, or even file an appeal with the IRS Independent Office of Appeals. There is also an option to go to Tax Court if it’s a large issue, but that’s rare for most people.

In any case, the IRS will explain your appeal rights in the audit report or letter if there are changes. The important thing is, you’re not automatically stuck with a bill if you genuinely believe the IRS got something wrong – you can challenge it (often with the help of a tax professional).

How Long Does an Audit Take?

Most audits wrap up within a few months, but it depends on the complexity of your return and how quickly you respond.

• Mail audits usually take less time

• In-person audits can take longer, especially if more information is needed later

As long as you respond on time and stay organized, you are doing your part to keep it moving.

Tips on Preparing for (and Surviving) an Audit

Getting audited is not fun, but you can get through it smoothly. Here are some practical tips to help you prepare and respond effectively:

• Stay Calm & Don’t Assume the Worst: An audit notice doesn’t mean you’re in trouble. As the IRS itself notes, selection for audit doesn’t automatically suggest a problem. Many audits end with no change or a small adjustment. Keeping this perspective will help you handle the process rationally.

• Read the Notice Carefully: It sounds simple, but read every word of the IRS letter. Identify exactly what they are questioning. Is it one deduction, your filing status, an income item? Knowing the scope helps you focus your response. The letter also gives instructions on how to reply and a deadline. Mark that date and plan ahead to meet it.

• Get Your Documents in Order: Start gathering the records related to the items under review: receipts, bills, canceled checks, forms (W-2s, 1099s), bank statements, etc. Organize them by category and date. Neat, complete documentation is your best defense in an audit. If you can show proof for every number the IRS is questioning, your audit will likely conclude with minimal changes.

• Only Provide What’s Requested: When replying, stick to the facts and documents asked for. Don’t offer additional information about other parts of your return that the IRS didn’t mention. Answer any specific questions truthfully and directly, but avoid rambling. This keeps the audit focused and concise.

• Keep Copies of Everything: Make copies of all documents you send to the IRS and keep them in a folder. If you have phone conversations with the IRS, log the date, time, and what was discussed. Having a paper trail is important. Also, never send your only copy of a precious document – send photocopies and keep the originals safe.

• Ask for Help if You Need It: If anything in the notice or the process is confusing, don’t hesitate to call the IRS (the letter will have a contact number) or seek guidance. You have the right to clear information about what they’re asking and why. And remember, you have the right to representation – which means you can enlist a tax professional to deal with the IRS on your behalf.

• Meet Deadlines or Request Extensions: Mark all IRS deadlines on your calendar. If you think you can’t gather everything in time, call or write to the IRS before the due date to request an extension. They often grant an extra 30 days for reasonable requests. Missing deadlines can lead the IRS to make decisions without your input, so stay proactive.

How to Lower Your Chances of Being Audited

While there’s no guaranteed way to avoid an audit, here are a few smart steps you can take:

• File a complete and accurate return

• Double-check your math and income reporting

• Don’t exaggerate deductions or expenses

• Keep clear records

• Use a trusted tax professional

Which brings us to our next point…

AMG Finance Can Help You Avoid (and Handle) Audits With Confidence

At AMG Finance, we don’t just help you file—we help you file correctly. Our experienced tax prep team knows how to spot errors, avoid red flags, and make sure your return holds up under scrutiny.

Final Thoughts: Stay Calm, Stay Informed

Getting audited doesn’t have to be a nightmare. With a bit of knowledge and the right support, it can be a manageable, even simple, process.Let AMG Finance help you prepare your taxes accurately and expertly – giving you peace of mind that, even if the IRS comes knocking, you’re ready. 

Reach out to your local AMG Finance branch to get started with professional tax preparation, and file with confidence knowing we’re here to support you every step of the way.

Here’s to stress-free filing and keeping more of your hard-earned money.