IRS Audit Attorney

The three kinds of IRS audit, and the letter that starts each one

The IRS runs three kinds of examination, and the letter number tells you which one you are in.

• Correspondence audit: Letter 566. The IRS asks by mail for documents on one or two items. Letter 566 (often 566-S or 566-CG) lists the items and gives you 30 days, and the audit is the paper you send.
• Office audit: Letter 3572. A tax compliance officer asks you to bring records to an IRS office, and Letter 3572 comes with Form 4564, the Information Document Request, listing what to bring. The examiner is trained to ask open questions while you are in the room.
• Field examination: Letter 2205. A revenue agent schedules an initial interview and examines the books at your business or your representative’s office, often for several years at once. Letter 2205-A goes to individuals and Letter 2205-B to businesses. This is where cash businesses and pass-through owners get hurt.
• The CP2000, which is not an audit. A CP2000 is a computer-matching proposal: the IRS matched your return against W-2s and 1099s and is proposing tax on the gap. It looks like a bill and it is not one; a written response within 30 days resolves most of them.

What the examiner asks for

Every request comes on Form 4564, the Information Document Request, and the examiner is entitled to what it asks for, not to everything you have. Section 7602 of the Internal Revenue Code lets the IRS examine books and take testimony; section 7605(b) limits it to one inspection of your books for each year unless it says in writing that another is necessary. A field examination begins with the initial interview: how the business works, who keeps the books and how cash is handled. The questions sound like small talk and they are not, because the answers set the baseline for the bank deposit analysis, in which the agent totals every deposit, business and personal, subtracts what you can prove was not income, and treats the rest as unreported receipts. We run that analysis before the agent does.

How long an IRS audit takes

A correspondence audit usually takes three to six months, an office audit somewhat longer, and a field examination a year or more. Those are ranges from our own files. Under section 6501(a) of the Internal Revenue Code the IRS generally has three years from the date you filed to assess additional tax, six years under section 6501(e) when the return omitted more than 25 percent of gross income, and no deadline under section 6501(c) for a fraudulent return or one that was not filed. When the agent runs short of time you will be asked to sign Form 872, a consent extending the statute, and whether to sign is a strategy decision.

What the smaller IRS means for your audit

The IRS workforce is about 27 percent smaller than it was in January 2025, so the agency opens fewer examinations and works them more deeply, with more of the volume handled by correspondence and automated selection. Responses take longer to be read. None of that changes the deadline on your letter; it makes a clean, complete, well-explained response worth more than it used to be.

What an IRS audit attorney does at each stage

The first filing is Form 2848, the power of attorney, and from that day the IRS deals with your representative rather than with you. Under section 7521(c) of the Internal Revenue Code it cannot require you to attend alongside your representative without a summons.

• Scope. We hold the audit to the years and items under examination, raising section 7605(b) when the agent reaches for something a prior examination already covered.
• Documents. Every document is reviewed before it is produced, and each Form 4564 is answered completely and narrowly.
• The interview. We attend, and in most cases we answer. Under section 7521(b) the interview stops when you ask to consult your representative.
• The report. The examination ends with Form 4549, Income Tax Examination Changes, and Form 886-A explaining each adjustment. Signing Form 4549 agrees to the assessment, so we do not sign until the number is right, and most audits are narrowed here.
• The 30-day letter and Appeals. If we do not agree, the IRS sends a 30-day letter (Letter 525 or Letter 915, depending on the examination) with the right to protest to the IRS Independent Office of Appeals, which for amounts over $25,000 means a formal written protest.
• The 90-day letter and Tax Court. If Appeals does not resolve it, the IRS issues a notice of deficiency, usually Letter 531 or Letter 3219, and under section 6213(a) of the Internal Revenue Code you have 90 days to petition the United States Tax Court. The IRS cannot assess while that period is open, and only an attorney can take the case there.

If a balance remains, our IRS collections attorney page covers what happens next.

Penalties in an IRS audit and how they are defended

The report usually proposes a 20 percent accuracy-related penalty under section 6662 of the Internal Revenue Code, and tax audit defense of that penalty rests on reasonable cause and on procedure. The defense under section 6664(c) is reasonable cause and good faith: you relied on a qualified preparer who had the complete facts, or the law was genuinely unclear. Section 6751(b) requires written supervisory approval of the penalty, and we check for it in every file. The civil fraud penalty under section 6663 is 75 percent of the underpayment attributable to fraud, and section 7454(a) puts the burden on the IRS to prove it by clear and convincing evidence. Its facts are the facts of a criminal referral, so we treat a proposed section 6663 penalty as a criminal question first.

Eggshell audits and the criminal referral

An eggshell audit is a civil examination in which the facts already contain criminal exposure, and the goal is to close it as a civil case. Unexplained cash, a second set of books, or an offshore account left off the FBAR are the usual ingredients. A revenue agent who finds what the IRS Manual calls firm indications of fraud is instructed to suspend the examination and refer it to IRS Criminal Investigation on Form 2797 without telling you, and the silence that follows is usually the only sign a taxpayer gets. The practitioner privilege under section 7525 of the Internal Revenue Code covers your CPA only in noncriminal matters, so your accountant can be summonsed and made to testify, and we retain any accountant under a Kovel arrangement so the work stays privileged. If this sounds like your audit, read our criminal tax attorney page first.

When a CPA is enough and when you need a tax audit lawyer

A CPA is the right choice for a correspondence audit with clean records, and a tax audit lawyer is the right choice when the audit involves a dispute about the law, a penalty, several years, cash, or anything that could become criminal. Your CPA can provide IRS audit representation under Form 2848 when the only question is whether the receipts support the deduction. The line moves when the agent asks about intent, when the report proposes a penalty, or when the IRS wants your personal bank statements.

Who we represent, and where

Our audit clients are mostly business owners and the businesses themselves: contractors, restaurants and other cash-intensive businesses, professionals, and companies whose Employee Retention Credit claims are under examination. We have handled $160M+ in ERC claims and eliminated more than $100 million in tax penalties and interest across 2,200+ matters. Brotman Law is in San Diego and represents clients across California and, because IRS procedure is the same in every state, in IRS audits nationwide by phone, video and secure document exchange. Local readers can start with our San Diego IRS audit attorney page; fee ranges are on the IRS audit attorney cost page.

Documents to gather before the first call

Gather the letter, the returns and the bank statements first, and do not create anything new.

• The audit letter, its envelope, and every notice before it.
• The returns for the years under examination and the year on either side.
• Statements for every bank, brokerage and credit card account, business and personal.
• The accounting file, invoices, and the records behind the largest deductions.
• Loan agreements, gift letters and sale documents that explain any deposit that was not income.

A missing record is an accuracy issue; a manufactured one is the referral. Our guide to IRS audits covers every stage in more depth.

How long does an IRS audit take?

Correspondence audits generally take three to six months from the first letter to the closing report, and field examinations a year or more. Appeals adds six to twelve months. The IRS generally has three years from filing to assess under section 6501 of the Internal Revenue Code.

Do I need a lawyer for an IRS audit, or is a CPA enough?

A CPA is enough for a correspondence audit with clean records. You need an IRS audit lawyer when there is a legal dispute, a penalty, several years, cash or any fact that could become criminal, because only a lawyer gives you privilege and can go to Tax Court.

What happens if I ignore an IRS audit letter?

The examiner closes the audit on the IRS numbers and issues a notice of deficiency. If you do not petition the Tax Court within 90 days under section 6213 of the Internal Revenue Code, the tax is assessed and collection begins. Silence does not end an audit; it removes your chance to shape it.