If you received an IRS letter that mentions an examination, a records request, or proposed changes to your return, the language can feel more serious than it sounds. An audit is not always a courtroom-style showdown. In many cases, it starts with a letter, a document request, and a deadline.
This post explains the main kinds of IRS audits, how records requests usually work, what “proposed changes” often mean, and where things can become riskier. In this post you’ll learn how correspondence exams differ from field exams, what the IRS may ask for, how disagreements typically move forward, and when legal representation becomes especially valuable.
For a broader overview of the entire tax controversy landscape, including audits, appeals, Tax Court, and collection risk, it may help to start with this larger guide to tax defense issues. If you want a simpler walkthrough of the exam process itself, this plain-English overview of how an IRS audit usually unfolds pairs well with what follows.
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The IRS describes an audit as a review of a return’s books, accounts, and financial records to verify whether items were reported correctly under the tax laws. Audits may happen by mail, in an IRS office, or at a taxpayer’s home, business, or representative’s office. The IRS says it closed 505,514 tax return audits in fiscal year 2024, with about $29 billion in recommended additional tax. IRS audits, IRS FY 2024 Data Book release
That number matters for two reasons. First, most returns are still accepted as filed. Second, when a return is selected, the process is structured and document-driven. The issue is often less about drama and more about substantiation, deadlines, and how the taxpayer responds.
The IRS also gives taxpayers rights at the start of an exam. Publication 1 summarizes the Taxpayer Bill of Rights, including the right to be informed, the right to challenge the IRS’s position, and the right to retain representation. The Internal Revenue Manual says Publication 1 is provided with the initial audit contact. Publication 1, IRM 4.10.1
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People often use “audit” as one catch-all term, but the setting matters. It affects how much the IRS is reviewing, how personal the interaction becomes, and how carefully the response often needs to be managed.
A correspondence exam is an audit handled by mail. The IRS sends a letter identifying the items under review and listing the documents or explanations it wants. The Taxpayer Advocate Service explains that these mail audits typically tell you what documentation to send, where to send it, and who to contact with questions. Audits by mail
This is often the least intrusive audit format, but it can still become expensive if the response is incomplete, poorly organized, or off-point. Publication 3498-A describes the basic pattern: review the IRS letter, gather the requested information, compare the IRS figures to the filed return, and reply by the stated deadline. If the IRS still disagrees, it may issue proposed changes and explain appeal rights. Publication 3498-A
Mail audits often focus on narrower issues such as credits, deductions, filing status, basis, or support for reported amounts. But “narrow” does not always mean “low risk.” A correspondence exam can expand if the response raises new issues or suggests broader reporting problems. The IRS says an audit may be expanded to include other years or related returns. IRS review of requested items
An office exam usually takes place at an IRS office and often involves a more detailed review than a mail audit. The IRS notes that interviews may occur at an IRS office, while the Taxpayer Advocate Service groups these under in-person audits. IRS audits, Audits in person
Office exams can feel manageable at first because they appear more conversational than adversarial. In practice, they often move quickly from one issue to another if the examiner sees inconsistencies, missing support, or answers that invite follow-up. Some taxpayers in this setting prefer to have communications routed through counsel or another authorized representative, especially where there are business deductions, mixed personal and business expenses, or prior-year filing issues.