Received an IRS audit letter or examination notice? The letter or form number usually tells you what stage of the examination you are in, what information the IRS is requesting, and what response options may be available. Some letters open an examination, some request records, some propose adjustments, and others provide appeal or Tax Court rights.
Before responding, identify the exact letter or notice number, read the response date carefully, and understand what the IRS is requesting. If the matter involves a significant adjustment, multiple tax years, business records, or an in-person examination, consider obtaining representation before providing documents or speaking with the examining agent. For representation throughout an examination, see our IRS Audit Representation page.
Common IRS Audit Letters and Examination Forms
IRS Letter 2205 — Examination Contact Letter
Letter 2205 is used in connection with IRS examinations and advises the taxpayer that a return has been selected for examination. Variations of the 2205 letter are used for different types of taxpayers and examinations. The letter generally identifies the examination and provides contact or appointment information.
If you receive an examination-opening letter, review the tax years and returns identified before responding. The scope of an audit matters because information produced for one issue or year can sometimes lead to questions about additional items.
Form 4564 — Information Document Request (IDR)
Form 4564 is an Information Document Request. IRS examiners use IDRs to request records and information during an examination. Depending on the audit, an IDR may request bank statements, accounting records, receipts, general ledgers, contracts, payroll information, mileage records, or other supporting documents.
An IDR should be reviewed carefully before documents are produced. The goal is to answer the request accurately and completely while understanding exactly what information the examiner is seeking.
IRS Letter 525 — General 30-Day Letter
Letter 525 is generally issued when an IRS examination results in proposed adjustments. It is commonly accompanied by an examination report, such as Form 4549, showing the proposed changes.
The letter explains the taxpayer’s options if the proposed adjustments are accepted or disputed. A taxpayer who disagrees may have an opportunity to submit additional information or request consideration by the IRS Independent Office of Appeals. The response date shown on the actual letter should be followed carefully.
IRS Letter 915 — Examination Report Transmittal
Letter 915 is another examination-report transmittal letter used when the IRS proposes adjustments following an audit. Like Letter 525, it can be part of the stage at which a taxpayer must decide whether to agree with the examiner’s conclusions or challenge them.
IRS Letter 531 — Notice of Deficiency
Letter 531 is a Notice of Deficiency, sometimes called a statutory notice of deficiency or 90-day letter. It is substantially more serious than an ordinary document request because it generally gives the taxpayer the right to petition the United States Tax Court without first paying the disputed tax.
The petition deadline stated in a Notice of Deficiency is critical. If you receive Letter 531 or another statutory Notice of Deficiency, do not assume that ordinary correspondence with the IRS extends the Tax Court filing deadline.
IRS Underreporter Notices
IRS Notice CP2501
CP2501 is associated with the IRS Automated Underreporter program. It may be issued when information reported to the IRS by third parties does not appear to match the taxpayer’s return. The notice gives the taxpayer an opportunity to explain the apparent discrepancy or provide supporting information.
IRS Notice CP2000
A CP2000 proposes changes when information reported to the IRS does not match the tax return. It is not necessarily the same as a traditional field or office audit, but it can result in a proposed assessment if the discrepancy is not resolved.
We discuss this process separately on our CP2000 proposed-changes page.
Other IRS Examination Documents
Form 4549 — Income Tax Examination Changes
Form 4549 is an examination report showing proposed changes to income tax. It may accompany an examination closing letter or a 30-day letter. Review the adjustments and the examiner’s explanation before agreeing to the proposed liability.
Form 886-A — Explanation of Items
Form 886-A is used to explain examination issues, adjustments, facts, law, and the IRS’s position. It often provides important detail behind amounts appearing on an examination report.
Form 4605-A — Examination Changes for Flow-Through and Other Entities
Form 4605-A is used in examinations involving certain partnerships, fiduciaries, S corporations, and other entities. A no-change result in a flow-through examination can also be communicated through IRS closing correspondence.
IRS No-Change Letters
If an examination concludes without an adjustment, the IRS may issue a no-change closing letter or report. The exact letter used can depend on the type of examination and taxpayer involved.
What to Do When You Receive an IRS Audit Letter
- Identify the letter or notice number. Look near the top or upper-right portion of the IRS correspondence and note every form or enclosure that came with it.
- Identify the tax years and returns involved. Make sure you understand exactly what period and return the IRS is examining.
- Calendar the response date immediately. Use the date actually stated on the IRS letter rather than assuming a standard deadline applies.
- Understand what the IRS is asking for before producing records. An Information Document Request can be narrow or extensive, and the requested material may affect the scope of the examination.
- Do not sign an examination agreement you do not understand. Proposed adjustments can affect tax, penalties, interest, related entities, and sometimes additional years.
- Consider representation before contacting the examiner. An attorney, CPA, or enrolled agent who is authorized to practice before the IRS may represent a taxpayer in many IRS examination matters.
Your Right to Representation During an IRS Audit
IRS Publication 1 explains taxpayer rights during an examination, including the right to retain an authorized representative. IRS Form 2848, Power of Attorney and Declaration of Representative, is commonly used to authorize a qualified representative to deal with the IRS on the taxpayer’s behalf.
Representation can be especially important where an audit involves a business, multiple years, substantial proposed adjustments, worker classification, payroll taxes, complex accounting records, or potential penalties.
IRS Audit Representation
An IRS audit letter is often only the beginning of the examination process. If the matter progresses, the taxpayer may face additional Information Document Requests, examiner meetings, proposed adjustments, Appeals, or a Notice of Deficiency.
For information about representation through that full process, see our IRS Audit Representation — Denver Tax Attorney & CPA page.
Related IRS Notice and Audit Resources
IRS letters may concern proposed adjustments, document requests, penalties, unreported income, return examinations, or related compliance issues.