Not every IRS audit requires a lawyer. A simple correspondence audit questioning a single deduction can often be handled on your own or with the help of your CPA. But there are situations where hiring an IRS audit lawyer isn’t optional — it’s the difference between a manageable outcome and a financial catastrophe.

You need an IRS audit lawyer when the proposed adjustment exceeds $50,000, when the IRS is examining multiple tax years simultaneously, when your return includes complex business income or international transactions, when the auditor has referred your case for potential fraud, or when you’ve received a notice scheduling a field audit at your home or business. If you are unsure whether your situation requires legal counsel, read our guide on when to hire a tax attorney. In each of these situations, the legal and procedural complexity requires someone who understands not just the tax code but the IRS examination process from the inside.

Call (619) 378-3138 to speak with an IRS audit defense attorney.

Types of IRS Audits

The IRS conducts several types of examinations, each with different procedures, stakes, and strategic considerations. Understanding which type of audit you’re facing is the first step in building an effective defense. For a comprehensive overview, read the ultimate guide to IRS audits.

Correspondence Audits

A correspondence audit is conducted entirely by mail. The IRS sends a notice — typically a Letter 566 or CP2000 notice — identifying specific items on your return that need verification. These are the most common type of audit, accounting for roughly 75% of all IRS examinations. Common triggers include unreported 1099 income, discrepancies between employer-reported W-2 wages and your return, and unusually large deductions for charitable contributions or medical expenses.

The IRS gives you 30 days to respond with supporting documentation. If you don’t respond, they’ll assess the additional tax automatically. While correspondence audits are generally lower-stakes, we’ve handled cases where the proposed adjustments reached well into six figures — particularly with CP2000 notices that allege unreported income from stock sales, retirement distributions, or cryptocurrency transactions.

Office Audits

An office audit (also called a desk audit) requires you to appear at your local IRS office with your records. You’ll receive a Letter 3572 (Appointment Letter) specifying the date, time, and items under examination. The audit is conducted by a Tax Compliance Officer (TCO) who specializes in individual returns with specific issue categories.

Office audits typically focus on 2-3 specific line items: itemized deductions, rental income and expenses, Schedule C business income, or dependency exemptions. The TCO will request specific documents — bank statements, receipts, mileage logs, profit-and-loss statements — and will compare your records against what you reported. These examinations usually take 3-4 hours in a single sitting, though complex cases may require follow-up sessions.

In our experience, having an IRS audit lawyer present at an office audit changes the dynamic significantly. We object to improper questions, prevent the scope of the audit from expanding beyond the original notice, and ensure you don’t inadvertently provide information that opens new lines of inquiry.

Field Audits

Field audits are the most intensive form of IRS examination. A Revenue Agent — not a Tax Compliance Officer — is assigned to your case and will conduct the audit at your home, business, or your attorney’s office. You’ll receive a Letter 2205 notifying you of the examination, along with an Information Document Request (IDR) listing the initial documents the agent needs.

Field audits are reserved for complex returns: businesses with gross receipts over $250,000, high-income individuals, partnership and S-corporation returns, and cases where the IRS suspects significant underreporting. Revenue Agents are more experienced and more thorough than TCOs. They’ll examine your entire return — not just specific line items — and they have the authority to expand the audit to additional years if they find material discrepancies.

The Revenue Agent will tour your business, interview employees, review your internal controls, and trace income through your bank accounts. A field audit can last weeks or months. This is where having an IRS audit lawyer is not just advisable — it’s essential. Your attorney can negotiate the scope of IDRs, prepare your employees for interviews, control the flow of information, and ensure the agent doesn’t exceed their authority.

TCMP/NRP Audits

The National Research Program (NRP) audit — formerly known as the Taxpayer Compliance Measurement Program (TCMP) — is a line-by-line examination of your entire return. The IRS uses NRP audits to update its Discriminant Information Function (DIF) scoring system, which determines which returns are statistically most likely to contain errors.

If you’re selected for an NRP audit, every single item on your return must be substantiated with documentation. These audits are random — your return wasn’t flagged for any particular issue. The IRS selects a statistically representative sample of returns for NRP examination each year. While you can’t avoid an NRP audit, an experienced IRS audit lawyer can streamline the process and prevent the exhaustive documentation requirements from becoming a trap that leads to unexpected adjustments.

Criminal Investigation Referrals

If a Revenue Agent uncovers evidence of potential fraud during a civil audit, they can refer your case to the IRS Criminal Investigation Division (CID). You may not be told this has happened. Warning signs include the auditor suddenly stopping communication, asking questions about your “intent” or “willfulness,” or requesting documents that go beyond the scope of a typical tax examination.

Under IRC Section 7201, tax evasion is a felony carrying up to 5 years in federal prison and fines up to $250,000. Under IRC Section 7206, filing a false return carries up to 3 years. If you have any reason to believe your civil audit is being considered for criminal referral, stop talking to the IRS immediately and retain an attorney. This is the single most important piece of advice in this entire page. Your Fifth Amendment right against self-incrimination applies, but only if you invoke it. Anything you say or provide to a Revenue Agent during a civil audit can be used against you in a criminal prosecution.

Your Rights During an IRS Audit

The Taxpayer Bill of Rights (codified at IRC Section 7803(a)(3)) establishes ten fundamental rights that apply throughout the audit process. Understanding these rights isn’t academic — it’s the foundation of an effective audit defense.

• Right to representation. You have the right to have an attorney, CPA, or enrolled agent represent you before the IRS. By filing Form 2848 (Power of Attorney and Declaration of Representative), your IRS audit lawyer becomes your authorized representative. The IRS must communicate with your attorney instead of you.
• Right to appeal. If you disagree with the examiner’s findings, you have the right to an administrative appeal within the IRS Office of Appeals — an independent body separate from the examination division. Appeals conferences are your best opportunity to resolve the case without going to Tax Court.
• Right to know why you were selected. The IRS must explain why your return was selected for examination and what specific items are being questioned. They cannot conduct a fishing expedition through your entire financial life.
• Right to confidentiality. The IRS cannot disclose your tax information to third parties except as authorized by law under IRC Section 6103. Your attorney-client communications receive an additional layer of protection through attorney-client privilege.
• Right to finality. You have the right to know the maximum amount of time you have to challenge the IRS’s position and the maximum amount of time the IRS has to audit a particular year. The general statute of limitations is three years from the date of filing under IRC Section 6501, though it extends to six years for substantial omissions of income (over 25%) and has no limit for fraud.
• Right to a fair and just tax system. You have the right to expect the tax system to consider facts and circumstances that might affect your underlying liabilities, ability to pay, or ability to provide information in a timely manner.

What an IRS Audit Lawyer Does

We don’t just sit in the room while the auditor asks questions. In our experience defending over 400 IRS audits since 2013, effective IRS audit defense is a structured process that begins before the first meeting with the IRS and continues through resolution — whether that’s at the examination level, at Appeals, or in Tax Court.

• Power of Attorney filing. We file Form 2848 immediately upon engagement. This directs all IRS communication through our office. The examiner stops calling you, stops sending notices to your home, and must work through your attorney.
• Document preparation and review. Before producing any documents to the IRS, we review everything. We identify which documents support your position, which documents need context, and which documents should not be produced because they fall outside the scope of the audit or are protected by privilege.
• IRS negotiation. We negotiate the scope of Information Document Requests, push back on overly broad requests, and manage the timeline of document production. We know what the examiner actually needs versus what they’re asking for, and we narrow the examination to the specific issues identified in the audit notice.
• Attending examinations on your behalf. In most cases, you don’t need to be present at the audit. Your attorney attends the examination, answers questions, presents documentation, and controls the narrative. This eliminates the risk of you accidentally saying something that expands the scope or creates new issues.
• Protecting against self-incrimination. If the audit has any potential criminal exposure, your attorney ensures you don’t waive your Fifth Amendment rights. We monitor for signals that the case may be referred to Criminal Investigation and take immediate protective action if necessary.
• Appeals representation. If we can’t resolve the audit at the examination level, we file a formal protest and represent you before the IRS Office of Appeals. Appeals officers have settlement authority that examiners don’t — they can consider the hazards of litigation, which often produces significantly better outcomes.
• Tax Court petition. If Appeals doesn’t produce an acceptable result, we file a petition with the U.S. Tax Court within the 90-day window provided by the Statutory Notice of Deficiency. Tax Court is a de novo proceeding — the judge examines the facts independently, without deference to the IRS’s position.

Red Flags That Trigger IRS Audits

The IRS uses a combination of computer scoring, document matching, and specific issue campaigns to select returns for examination. We advise our clients to understand what triggers an IRS audit — it helps you prepare, and it helps us anticipate the examiner’s lines of inquiry.

• DIF scoring. The IRS’s Discriminant Information Function assigns a numerical score to every return based on how likely it is to produce additional tax on examination. Returns with high DIF scores are flagged for manual review by IRS classifiers, who decide whether to open an audit.
• High income. Taxpayers with adjusted gross income over $500,000 are audited at significantly higher rates than the general population. Above $1 million, audit rates increase further.
• Cash-intensive businesses. Restaurants, bars, car washes, laundromats, and other businesses that handle large amounts of cash are perennial audit targets. The IRS uses indirect methods — bank deposit analysis, markup analysis, net worth method — to estimate unreported income.
• Large deductions relative to income. Charitable contributions exceeding 5% of AGI, unreimbursed employee expenses, and business deductions that significantly reduce taxable income all increase your DIF score.
• Home office deduction. The home office deduction has historically been an audit trigger, particularly when claimed on a Schedule C. The IRS examines whether the space is used “regularly and exclusively” for business under IRC Section 280A.
• Cryptocurrency transactions. The IRS has made cryptocurrency compliance a priority. If you received a Form 1099-DA or 1099-B from an exchange but didn’t report the transactions, expect a notice. The IRS also tracks blockchain transactions through John Doe summonses served on exchanges like Coinbase and Kraken.
• Foreign accounts (FBAR/FATCA). If you hold foreign bank accounts exceeding $10,000 in aggregate value, you’re required to file FinCEN Form 114 (FBAR). FATCA requires reporting on Form 8938 for specified foreign financial assets. Failure to report triggers penalties starting at $10,000 per account per year — and the IRS receives information directly from foreign banks under exchange-of-information agreements.
• 1099 mismatches. The IRS’s Automated Underreporter program matches 1099s and W-2s against your return. If a payer reported income to the IRS that doesn’t appear on your return, you’ll receive a CP2000 notice automatically.
• Amended returns. Filing an amended return (Form 1040-X) that significantly reduces your tax liability can trigger an examination of both the original and amended returns.
• Schedule C losses. Reporting business losses on Schedule C for multiple consecutive years raises the IRS’s suspicion that your activity is a hobby rather than a business under IRC Section 183. The IRS applies a nine-factor test to determine whether you have a genuine profit motive.
• Charitable contributions. Non-cash charitable contributions over $5,000 require a qualified appraisal. Conservation easement donations — particularly syndicated easements — are an IRS enforcement priority and are listed transactions.

Audit Outcomes and Resolution Options

Every IRS audit ends in one of three ways. Understanding the process after the examiner issues their findings is critical to protecting your rights.

No Change

The examiner agrees that your return was filed correctly and proposes no adjustments. You’ll receive a “no change” letter, and the audit is closed. This is the ideal outcome, and it happens more often than people think — particularly when taxpayers have good records and competent representation.

Agreed

You agree with some or all of the examiner’s proposed adjustments. You sign a Form 870 (Waiver of Restrictions on Assessment and Collection) or Form 4549 (Income Tax Examination Changes), and the IRS assesses the additional tax. The advantage of agreeing at the examination level is speed — the case closes quickly, and you can move on. In some cases, we negotiate a partial agreement: you accept some adjustments and dispute others.

Unagreed

If you disagree with the examiner’s findings, the case enters a structured appeals process with specific deadlines and procedural requirements:

1. 30-Day Letter. The examiner issues a preliminary report and a letter giving you 30 days to either agree or file a formal protest with the IRS Office of Appeals. This is called the Letter 950 or Letter 525, depending on the type of case.
2. IRS Appeals Conference. If you file a timely protest, your case moves to the IRS Office of Appeals. Appeals officers are independent of the examination division and have authority to settle cases based on the “hazards of litigation” — essentially, what might happen if the case went to court. Appeals resolves the majority of cases favorably for taxpayers. This is often where the best outcomes are achieved.
3. 90-Day Letter (Statutory Notice of Deficiency). If Appeals doesn’t resolve the case, or if you didn’t request Appeals, the IRS issues a Statutory Notice of Deficiency — commonly called the 90-day letter. This is a formal legal document giving you exactly 90 days to file a petition with the U.S. Tax Court. If you miss this deadline, the IRS assesses the tax, and your only option is to pay the full amount and sue for a refund in federal district court or the Court of Federal Claims.
4. Tax Court Petition. Filing a petition with the U.S. Tax Court preserves your right to contest the IRS’s position without paying the tax first. The Tax Court is a specialized court where judges have deep expertise in tax law. Most Tax Court cases settle before trial, often on terms significantly better than what the IRS offered at examination or Appeals.

Why Choose Brotman Law for IRS Audit Defense

We’ve defended over 400 IRS audits — correspondence, office, and field. We’ve represented taxpayers at every stage of the audit process, from the initial contact letter through Tax Court litigation. Here’s what sets our approach apart.

Sam Brotman is a San Diego tax attorney admitted to practice before the U.S. Tax Court, with over 15 years of experience focused exclusively on tax controversy. He doesn’t dabble in tax law between real estate closings and estate plans. Tax controversy is all we do.

Our experience spans every type of audit: individual income tax, business returns (partnerships, S-corps, C-corps), employment tax, ERC credit examinations, and international reporting issues. We’ve handled audits involving unreported cryptocurrency transactions, foreign bank accounts, Schedule C businesses, and large charitable contribution deductions.

When you retain Brotman Law for IRS audit defense, here’s how we work:

1. Case evaluation. We review the audit notice, your tax returns, and your records to assess the strength of your position and identify potential vulnerabilities.
2. Power of Attorney. We file Form 2848 so the IRS communicates with us — not you. The calls and letters stop.
3. Document preparation. We organize and review all documents before producing anything to the IRS. We prepare a written narrative explaining each item under examination.
4. Examination management. We attend all meetings with the IRS, respond to IDRs, and negotiate the scope of the examination. In most cases, our clients never interact directly with the examiner.
5. Resolution. We push for the best possible outcome at examination. If the examiner’s position is unreasonable, we take the case to Appeals or Tax Court — whichever gives you the strongest path to a favorable result.

IRS Audit Defense Results

Past results do not guarantee a similar outcome. Every audit is different, and results depend on the specific facts and law at issue. But these cases illustrate the kind of outcomes that are possible with thorough preparation and experienced representation.

2026 IRS Enforcement Climate

The IRS enforcement landscape has changed dramatically since the Inflation Reduction Act (IRA) directed approximately $80 billion in new funding to the agency, with a significant portion earmarked for enforcement. The IRS is hiring tens of thousands of new enforcement personnel — including Revenue Agents, Revenue Officers, and Criminal Investigation special agents — to close what the Treasury Department estimates is a $600+ billion annual tax gap.

The enforcement surge is focused squarely on high-income taxpayers. IRS Commissioner Daniel Werfel has stated repeatedly that audit rates for taxpayers earning under $400,000 will not increase above historical levels. But for taxpayers above that threshold, audit rates are climbing. In fiscal year 2025, the IRS increased audits of taxpayers with income above $1 million by over 50% compared to the prior year, and that trajectory is continuing into 2026. If you earn above $400,000, the probability that your return will be selected for examination is meaningfully higher than it was two years ago.

Cryptocurrency enforcement is another major priority. The IRS has served John Doe summonses on major exchanges including Coinbase, Kraken, and Circle, obtaining transaction records for millions of account holders. Beginning with tax year 2025, exchanges must issue Form 1099-DA reporting digital asset transactions. The IRS is using blockchain analytics tools to trace unreported transactions, and crypto-related audits are increasing across all income levels.

Partnership audits have also intensified under the Bipartisan Budget Act (BBA) centralized partnership audit regime. Large partnerships — particularly those involved in syndicated conservation easement transactions, complex allocation structures, and multi-tier investment arrangements — are being examined at rates not seen in decades. The BBA regime allows the IRS to assess adjustments at the partnership level rather than chasing individual partners, making these audits more efficient for the IRS and more consequential for taxpayers.

The bottom line: if you receive an IRS audit notice in 2026, you are facing a better-funded, better-staffed, and more aggressive enforcement operation than at any point in the past 15 years. We’ve seen this shift firsthand in the complexity and aggressiveness of the audits landing on our desk — having an experienced IRS audit lawyer is more important now than it has been in a generation.

IRS Audit Types: A Detailed Breakdown

Beyond the standard categories, IRS audits increasingly target specific industries, asset classes, and compliance areas. Here are eight violation categories we defend regularly, each with its own procedural nuances and strategic considerations.

1. Correspondence Audit

The most common audit type, accounting for roughly 75% of all IRS examinations. Correspondence audits are conducted entirely by mail — you receive a notice (typically Letter 566 or a CP2000 notice) identifying specific items that need documentation. Response deadlines are strict: you generally have 30 days. Common targets include unreported 1099 income, charitable contribution substantiation, and education credits. While correspondence audits are lower in intensity, the proposed adjustments can reach six figures, particularly with CP2000 notices alleging unreported stock sales or cryptocurrency gains.

2. Office Audit

An office audit (desk audit) requires an in-person appearance at your local IRS office. You receive a Letter 3572 scheduling the appointment and listing the specific items under examination — typically 2 to 3 line items such as itemized deductions, rental income, or Schedule C income. A Tax Compliance Officer (TCO) conducts the examination, usually in a single 3-4 hour session. Having your IRS audit lawyer present prevents scope expansion and ensures you provide only what is required under the audit notice.

3. Field Audit

The most intensive examination type. A Revenue Agent — more experienced and authorized than a TCO — conducts the audit at your home, business, or your attorney’s office. Field audits target complex returns: businesses with gross receipts exceeding $250,000, high-income individuals, partnerships, and S-corporations. The agent examines your entire return, has authority to expand to additional years, and will tour your premises, interview employees, and trace income through bank deposits. Field audits can last months. Legal representation is not optional — it is essential.

4. Eggshell Audit

An “eggshell audit” is a civil audit where the taxpayer knows (but the IRS does not yet know) that there is potential criminal exposure — unreported income, fraudulent deductions, or willful noncompliance. The term comes from the need to walk on eggshells: you must cooperate with the civil audit without volunteering information that triggers a criminal referral. This is the most dangerous audit scenario. Your IRS audit lawyer must carefully balance compliance with the civil examination against Fifth Amendment protections, monitoring every question and document request for signals that the case is being considered for Criminal Investigation Division referral.

5. Crypto & Digital Asset Audit

The IRS has made cryptocurrency enforcement a top priority. Crypto audits target unreported gains from trading, failure to report airdrops and staking rewards, NFT transactions, DeFi protocol income, and discrepancies between exchange-reported 1099-DA data and your return. The IRS uses blockchain analytics (Chainalysis, CipherTrace) to trace transactions across wallets and exchanges. Defending a crypto audit requires understanding both tax law and blockchain technology — how wallets interact, how cost basis is calculated across exchanges, and how to substantiate positions when exchange records are incomplete or unavailable.

6. FBAR/Offshore Account Audit

If you hold foreign bank or financial accounts exceeding $10,000 in aggregate value, you must file FinCEN Form 114 (FBAR). FATCA requires additional reporting on Form 8938 for specified foreign financial assets. Failure to file carries penalties starting at $10,000 per account per year for non-willful violations, and the greater of $100,000 or 50% of account balances for willful violations. The IRS receives account information directly from foreign banks under bilateral exchange-of-information agreements, making non-disclosure increasingly difficult. An FBAR audit frequently involves voluntary disclosure considerations and potential criminal exposure.

7. Employment Tax / Payroll Audit

Employment tax audits examine whether your business properly classified workers (employee vs. independent contractor), calculated and remitted payroll taxes correctly, and filed Forms 941 on time. The IRS applies a 20-factor test (and the updated common-law factors) to determine worker classification. Misclassification can result in assessment of unpaid FICA, FUTA, and income tax withholding — plus the Trust Fund Recovery Penalty (TFRP) under IRC Section 6672, which holds responsible individuals personally liable for unpaid employment taxes. Employment tax audits have increased substantially as the IRS targets the gig economy and businesses with large contractor workforces.

8. Cannabis & Cash-Intensive Business Audit

Cannabis businesses face unique audit challenges. Under IRC Section 280E, businesses trafficking in controlled substances (including marijuana, which remains a Schedule I substance federally) cannot deduct ordinary business expenses — only cost of goods sold. The IRS aggressively audits cannabis dispensaries and cultivation operations, using indirect methods (bank deposit analysis, markup method, net worth method) to estimate unreported income. Other cash-intensive businesses — restaurants, car washes, laundromats, convenience stores — face similar scrutiny. Defending these audits requires demonstrating accurate income reporting through meticulous records and understanding the IRS’s indirect income reconstruction techniques.

Audit Defense Playbook: How Brotman Law Protects You

When you retain Brotman Law, we execute a proven five-step defense process that keeps you insulated from the IRS and puts an experienced attorney between you and the examiner.

Step 1: We file Form 2848 (Power of Attorney) so the IRS contacts us, not you. The moment you engage our firm, we submit Form 2848 to the IRS designating our office as your authorized representative. From that point forward, all IRS communications — phone calls, letters, document requests, meeting schedules — come to us. The examiner cannot contact you directly. The calls to your home and office stop.

Step 2: We review every IDR (Information Document Request) before responding. The IRS examiner will issue IDRs listing the documents they want. We review each request against the scope of the audit notice. If the examiner requests documents beyond the stated scope, we push back. If a document could open a new line of inquiry, we assess the risk before producing it. Every piece of paper the IRS receives has been reviewed by your attorney.

Step 3: We negotiate the scope of the examination. Revenue Agents sometimes attempt to expand audits beyond the original issues identified in the contact letter. We hold the examiner to the stated scope, and if expansion is proposed, we negotiate terms that protect your interests — including whether additional years can be opened and which specific items are subject to review.

Step 4: We attend all conferences with the examiner. In most cases, you never meet the IRS examiner. Your attorney attends all meetings, responds to questions, presents documentation, and manages the flow of information. This eliminates the risk of you making statements that expand the audit, create inconsistencies, or inadvertently waive protections.

Step 5: If an assessment is proposed, we exercise your appeal rights. If the examiner proposes adjustments we believe are incorrect or excessive, we do not simply accept the finding. We request a conference with the examiner’s manager. If that doesn’t resolve the issue, we file a formal protest and take the case to the IRS Office of Appeals — or, if necessary, to Tax Court. We pursue every available avenue to reduce the proposed assessment to the lowest legally defensible amount.

The Appeals Path: From 30-Day Letter to Tax Court

If you disagree with the examiner’s findings, the IRS audit process provides a structured appeals path with specific deadlines that must not be missed. Understanding this timeline is critical because missing a deadline can permanently waive your rights.

30-Day Letter (Protest to IRS Appeals). After the examiner finalizes their findings, you receive a Letter 950 or Letter 525 — the “30-day letter” — along with the examination report. You have 30 days to file a written protest requesting review by the IRS Office of Appeals. The protest must include a statement of facts, identification of the issues in dispute, and the legal authority supporting your position. For cases with proposed adjustments under $25,000, a simplified request (Small Case Request) is available.

IRS Appeals Conference. The IRS Office of Appeals is independent of the examination division. Appeals Officers have settlement authority based on the “hazards of litigation” — essentially, what might happen if the case went to court. This is often where the best outcomes are achieved. Appeals resolves the majority of disputed cases, and settlements at Appeals frequently produce substantially better results than the examiner’s original position.

90-Day Letter (Statutory Notice of Deficiency). If Appeals does not resolve the case — or if you did not request Appeals — the IRS issues a Statutory Notice of Deficiency. This is the “90-day letter,” a formal legal document giving you exactly 90 days to file a petition with the U.S. Tax Court. This deadline is jurisdictional — if you miss it, the IRS assesses the tax, and your only option is to pay in full and sue for a refund in district court or the Court of Federal Claims.

Tax Court Petition. Filing a petition with the U.S. Tax Court preserves your right to contest the IRS’s position without paying the disputed tax first. The Tax Court is a specialized court staffed by judges with deep tax expertise. Most Tax Court cases settle before trial — often on terms significantly better than what the IRS offered at any prior stage.

CDP/CAP Hearings. If the dispute involves collection actions — levies, liens, or garnishments — rather than the underlying tax liability, you may be entitled to a Collection Due Process (CDP) hearing or Collection Appeals Program (CAP) review. CDP hearings provide an opportunity to challenge the proposed collection action and raise alternative resolution options, including offers in compromise and installment agreements. A CDP hearing also preserves your right to judicial review in Tax Court.

How We Defend Your IRS Audit: Step by Step

1. Free Intro Call — We review your audit notice (Letter 2202, 3572, or 4564), identify the issues, and assess your exposure.
2. Form 2848 Filed — We file Power of Attorney so the IRS communicates with us, not you. You never speak to the IRS directly.
3. IDR Strategy — We review every Information Document Request before responding. We produce what’s required — nothing more.
4. Examination Conference — We attend all meetings with the IRS examiner, control the narrative, and protect against scope expansion.
5. Proposed Adjustments — If the examiner proposes changes, we challenge every unsupported adjustment with documentation and legal authority.
6. 30-Day Letter Response — We file a formal protest to IRS Appeals if we can’t resolve at exam level.
7. Appeals Conference — We negotiate directly with the Appeals Officer for a settlement based on litigation hazards.
8. Tax Court Rights Preserved — If Appeals fails, we preserve your right to petition Tax Court within the 90-day statutory window.

Call (619) 378-3138 to get started with a free intro call.

What Only a Practitioner Would Know About IRS Audits

Most content about IRS audits recycles the same general advice. What follows are insights drawn from our direct experience defending over 400 audits — the kind of knowledge that only comes from years inside the examination process.

Revenue Agents vs. Revenue Officers: The Distinction That Changes Everything

We see this confusion constantly, even from other attorneys. Revenue Agents work in the IRS’s Small Business/Self-Employed (SBSE) division and conduct audits — they examine your return, request documents, and propose adjustments. Revenue Officers work in the Collection division and collect — they file liens, issue levies, and seize assets. They are different people with different powers, different IRM guidelines, and completely different strategic approaches. When a client calls us and says “the IRS agent is threatening to levy my bank account,” we immediately know they’re dealing with a Revenue Officer, not an audit — and the defense playbook is entirely different. Confusing the two can lead to catastrophic missteps in your response.

The IDR Game: How Document Requests Actually Work

IRS examiners in SBSE typically open with IDR #1 requesting three years of bank statements for every account you hold. What you produce in response to that first IDR determines the trajectory of the entire audit. We’ve found that the most critical step is producing exactly what’s requested — nothing more, nothing less. Inexperienced representatives often dump boxes of unsorted records on the examiner’s desk thinking it shows cooperation. In reality, it gives the examiner ammunition to expand the audit into areas they never would have examined otherwise. We review every document before it goes to the IRS, and we redact or withhold anything that falls outside the stated scope of the examination.

The 30-Day Letter Is Your Most Important Deadline

After the audit concludes, the IRS issues a 30-day letter — Letter 950 or Letter 525 depending on the case type. This is your window to file a protest to IRS Appeals, an informal proceeding where, in our experience, roughly 80% of cases settle on terms more favorable than the examiner’s position. Miss the 30-day window, and the IRS issues a 90-day Statutory Notice of Deficiency — and your only option becomes Tax Court. We’ve taken on clients who came to us after missing the 30-day deadline, and while we can still fight effectively in Tax Court, the Appeals path is almost always faster, cheaper, and produces better outcomes. We tell every client: the 30-day letter is the single most important piece of mail you will receive during an audit.

Why the Audit Reconsideration Path Exists (And When to Use It)

If you missed both the 30-day and 90-day windows — and the IRS has already assessed the tax — most people assume it’s over. It’s not. Audit reconsideration under IRM 4.13 lets you reopen a closed audit by presenting new information or documentation that wasn’t previously considered. We’ve used this procedure to reopen and reduce assessments that clients had given up on entirely. It’s not a guaranteed path, and the IRS can deny the request, but in cases where the taxpayer simply failed to respond to the original audit notice — which happens more often than you’d think — audit reconsideration can produce dramatic results.

Repetitive Audit Protection: The Rule Most Attorneys Don’t Invoke

Here’s something we invoke regularly that most tax attorneys don’t even know exists: IRM 4.10.2.7.1 provides that if the IRS audited the same issue in either of the two preceding tax years and proposed no change, you can request that the current audit be closed without examination on that issue. We’ve closed audits outright using this provision. When a new client brings us an audit notice, one of the first things we check is whether the same issue was examined in prior years. If it was — and the IRS made no change — we file a repetitive audit claim immediately. It doesn’t always work, but when it does, it ends the audit before it even begins.