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What IRS Audit Defense Is
IRS audit defense is legal representation during an IRS examination of your tax returns. The IRS audits returns to verify that the income, deductions, and credits you reported are accurate. When you have an attorney representing you, all IRS contact flows through counsel. You do not speak to the revenue agent directly. Your attorney controls what information gets produced and how.
The short version is this: most audits are winnable at the examination level, before you ever reach Appeals or Tax Court. The outcome depends on how your responses are structured, what documents are produced, and whether your attorney understands how the IRS builds an adjustment. We have handled 400+ audits since 2013. We know how this works.
If you have received an IRS notice or audit letter — a CP2000, a Letter 2205-A, or a notice that a revenue agent has been assigned — the first step is to get a Power of Attorney on file so that the IRS talks to us, not you.
Types of IRS Audits Brotman Law Handles
The type of audit you are in matters. Each has different stakes, different procedures, and a different strategy.
Correspondence Audits
A correspondence audit is conducted entirely by mail. The IRS sends a notice — often a CP2000 (proposed changes based on information returns) or a CP2501 — and asks you to respond with documentation. These are typically automated: the IRS's computer matched your return against third-party information (W-2s, 1099s, broker statements) and found a discrepancy.
They are the most common type of audit and also the most underestimated. Many taxpayers respond directly and agree to adjustments they do not legally owe. A CP2000 is a proposal, not a bill. You have the right to dispute it. We review the discrepancy, identify what the IRS is actually looking for, and respond with documentation and legal argument where appropriate.
Office Examinations
An office examination summons you to an IRS office to discuss one or two specific issues on your return — a business loss, a charitable contribution, a home office deduction. The IRS agent is examining a narrow set of items. With proper representation, the goal is to resolve those items at the lowest possible adjustment and close the case at the office level.
Field Examinations
A field examination is the most extensive type. An IRS revenue agent comes to your place of business and examines your books, records, and operations — often across multiple tax years and multiple issues simultaneously. Field exams are common for self-employed taxpayers, S-corporation owners, and businesses in cash-intensive industries.
The Information Document Request (IDR) process is where field exams are won or lost. The IDR is the IRS's formal request for documents. We manage the IDR response: what to produce, in what format, and how to present it so that the examination stays scoped. Volunteering information beyond what the IDR asks is one of the most common audit mistakes taxpayers make on their own.
Eggshell Audits
An eggshell audit is a civil examination where criminal exposure is already present. The revenue agent is conducting what looks like a routine audit, but the underlying facts — substantial unexplained income, records inconsistencies, two sets of books — already suggest potential fraud.
This is the most sensitive type of audit representation. The goal is to resolve the civil examination without generating a referral to IRS Criminal Investigation (CI). That requires understanding exactly what CI looks for as evidence of willfulness and structuring the audit response accordingly. A mistake here — the wrong document produced at the wrong time, the wrong explanation given directly to an agent — can convert a civil matter into a criminal one. We have handled eggshell audits extensively. This is not a situation for a CPA or a general practitioner.
See our criminal tax defense page for more on eggshell audits and what happens when a civil exam transitions to a criminal investigation.
Repetitive Audits
Under IRC § 7605(b), the IRS cannot conduct an unnecessary examination or investigation of a taxpayer. By IRS administrative policy, if you were audited on a particular issue in one of the two prior tax years and the examination produced no change, you can request that the IRS suspend the current audit of that same issue. This is called a repetitive audit claim. Most taxpayers do not know this protection exists. We assert it where it applies.
How Sam Manages the IRS Audit Process
The audit process has defined stages, and your rights are different at each one. We manage every stage.
Form 2848 — Power of Attorney
The first thing we do on any audit engagement is file Form 2848, the IRS Power of Attorney. Once filed, the IRS is required to contact us, not you. Your phone doesn't ring. Your front desk doesn't get IRS calls. We handle all correspondence, all phone conferences, all document production.
IDR Responses — Document Production Strategy
The Information Document Request (IDR) is the IRS's formal mechanism for requesting records during a field examination. We review each IDR carefully before producing anything. The question is not just "do we have this document?" — it is "what does producing this document tell the IRS, and does producing it open issues beyond the scope of the current IDR?" Document production strategy is one of the areas where attorney representation makes the most difference.
Revenue Agent's Report (RAR) — Form 4549
At the close of examination, the IRS issues a Revenue Agent's Report (RAR), reported on Form 4549. The RAR sets out the proposed adjustments to your return and the resulting tax liability. You have the right to disagree. We review the RAR, identify legal and factual errors, and determine whether the best response is a protest to IRS Appeals, a petition to U.S. Tax Court, or a settlement at examination.
30-Day Letter — Right to Appeal
After the RAR, the IRS sends a 30-day letter (formally, Letter 525 or Letter 915). This letter gives you 30 days to request a conference with the IRS Office of Appeals. Appeals is independent from the Examination division and resolves a significant percentage of disputed cases without litigation. Missing the 30-day letter deadline does not eliminate your rights entirely, but it does make the path harder. We calendar every deadline and manage the response.
90-Day Letter — Notice of Deficiency
If the case is not resolved at examination or Appeals, the IRS issues a Notice of Deficiency under IRC § 6212 — commonly called the 90-day letter. You have 90 days from the date of the notice (150 days if mailed to an address outside the United States) to petition the U.S. Tax Court. If you do not file a petition within that window, the deficiency becomes automatically assessed and collectible. The 90-day letter is one of the most critical deadlines in a tax dispute. We do not let it pass without a decision.
IRS Office of Appeals
The IRS Office of Appeals is an independent function within the IRS — separate from the Examination division — that reviews disputed cases. Appeals officers have settlement authority and resolve most cases without trial. The standard is "hazards of litigation": both sides look at what a court would likely decide and negotiate toward that result. We prepare a formal written protest, present the legal and factual arguments, and handle the Appeals conference. Most of our audit cases resolve at the Appeals level.
Statute of Limitations for IRS Audits
The IRS does not have unlimited time to audit your returns. The statute of limitations is a real defense — but there are exceptions that substantially extend it.
The standard audit period is three years from the later of the return's filing date or its due date, under IRC § 6501(a). For most individual returns filed by April 15, the IRS has three years from April 15 to assess additional tax.
There are two significant exceptions:
Substantial understatement of income (IRC § 6501(e)): If you omitted more than 25% of your gross income from a return, the limitations period extends to six years. This commonly comes up in cases involving unreported offshore income, large cash transactions, or missed 1099s.
Fraud or failure to file (IRC § 6501(c)): If a return was filed with a willfully false statement, or if no return was filed, the IRS has no statute of limitations. There is no time limit on assessment.
One more point that taxpayers frequently miss: the IRS may ask you to sign Form 872, a consent to extend the statute of limitations. This is a waiver. You can decline — but there are strategic situations where agreeing to an extension is the better move (for example, when you need more time to gather documentation and going to Tax Court would be worse). We evaluate every Form 872 request before advising whether to sign.
IRS Audit Representation: Why Attorney Representation Is Different
An attorney's communications with you are protected by attorney-client privilege. A CPA's are not — and that distinction can matter enormously if the audit escalates.
The attorney-client privilege protects confidential communications between a client and their attorney made for the purpose of obtaining legal advice. It means your attorney cannot be compelled to testify about what you told them. It also protects attorney work product — the mental impressions, legal theories, and strategies the attorney develops on your behalf.
CPAs do not have that protection. IRC § 7525 creates a limited federally authorized tax practitioner privilege, but it is narrow: it covers only federal tax advice, only in non-criminal proceedings, and it does not apply to matters before the IRS in examination. In practice, anything your CPA knows about your tax situation — your income, your deductions, conversations you had about a particular issue — can be subpoenaed in a subsequent proceeding.
The Kovel arrangement, established in United States v. Kovel, 296 F.2d 918 (2d Cir. 1961), provides a practical solution. When a law firm retains an accountant to assist with a legal matter — under a Kovel letter from the attorney — the accountant's work product and communications with the attorney are protected by the attorney-client privilege. We use Kovel arrangements routinely when forensic accounting work is needed in an audit. It allows us to get the accounting expertise the case requires without creating a privilege gap.
This matters most in eggshell audits and in any situation where there is a possibility the civil matter could develop a criminal dimension. If you are in that situation, working through an attorney is not just preferable — it is the only way to protect the communications from the outset.
For a deeper discussion of attorney-client privilege and how it applies in criminal tax matters, see our criminal tax defense page.
How Brotman Law Handles Audits
We represent clients under Form 2848 before all IRS divisions — Examination, Appeals, and Collection — and our goal is always to close the audit at the lowest level with the smallest possible adjustment.
When you retain us on an audit matter, here is what happens:
We file Form 2848 and all IRS contact routes through us. You stop dealing with the IRS directly. We pull all relevant returns, transcripts, and prior IRS correspondence to understand the full picture before the first substantive IRS contact.
We analyze what the IRS is actually looking at. That means reviewing the IDR carefully, identifying which issues are real and which are procedural, and setting a strategy. In most audits, the IRS's opening position overstates what it can actually support. Our job is to identify that and negotiate accordingly.
We manage document production. We do not produce more than the IDR asks for. We structure submissions to be clear and responsive without opening new issues. We accompany every document production with explanation where the facts need context.
If the revenue agent's proposed adjustments are not acceptable, we prepare a protest and escalate to the IRS Office of Appeals. Most cases resolve at Appeals. If they do not, we advise on Tax Court litigation.
I have represented 400+ clients in IRS audits since founding Brotman Law in 2013. The IRS Audit Guide on this site goes deeper on the procedural mechanics if you want to understand what you are walking into before we talk.
If you have received an IRS notice or an audit letter, book a free 15-minute call and we can discuss where you are and what to do next.
Frequently Asked Questions
Do I need a tax attorney for an IRS audit?
You are not required to have a representative. You can handle an IRS audit on your own, or through a CPA or enrolled agent. That said, an attorney provides something a CPA cannot: attorney-client privilege. If there is any possibility that the audit could escalate — into an eggshell situation, an Appeals dispute, or Tax Court — having that privilege from the start matters. For a routine correspondence audit involving a minor discrepancy, the calculation is different than for a multi-year field examination with a revenue agent in your office. We are happy to talk through whether representation makes sense for your specific situation.
How long does an IRS audit take?
A correspondence audit that you respond to promptly and completely can close in a few months. An office examination typically runs three to six months. A field examination — especially one involving multiple years and multiple issues — can run one to two years, sometimes longer. The IRS's processing capacity affects timing, and the case gets more complex if it escalates to Appeals. The statute of limitations does not run while a case is in Appeals, which is why we try to close field exams at the examination level when possible.
What is the difference between a correspondence audit and a field audit?
A correspondence audit is conducted by mail. The IRS identifies a discrepancy — usually between your return and third-party information — and asks you to respond with documentation. It is typically limited to one or two issues. A field audit involves a revenue agent assigned to your case who examines your books and records in person, often at your business location. Field audits are more extensive, cover more issues, and carry higher stakes. The IDR process, document production strategy, and the risk of the agent expanding the scope of the audit all require close management.
Can an IRS audit turn into a criminal case?
Yes. A civil audit can result in a referral to IRS Criminal Investigation if a revenue agent discovers evidence suggesting willful fraud — substantial unexplained income, fabricated records, or a pattern of underreporting across multiple years. This transition is exactly what the eggshell audit framework is designed to prevent. If there is any existing criminal exposure in your matter, the audit needs to be managed accordingly from day one. Responding directly to a revenue agent without counsel in that situation is the kind of mistake that is very difficult to undo.
What happens if I disagree with the IRS audit findings?
You have formal appeal rights at each stage. After the Revenue Agent's Report (Form 4549), you receive a 30-day letter giving you the right to request a conference with the IRS Office of Appeals. Appeals is independent from Examination and resolves most disputed cases. If Appeals does not resolve the matter, you receive a Notice of Deficiency (the 90-day letter) under IRC § 6212 and have 90 days to petition the U.S. Tax Court. You can also pay the assessment and file a refund claim in district court or the Court of Federal Claims. We evaluate which path is best based on the facts and the amounts at issue.