An IRS audit can seem daunting, but it doesn’t have to be a disaster — especially if you know your rights and respond appropriately. At McCauley Law Offices, we view an audit as a legal process where preparation and protection of your rights are just as important as your financial records.
Here’s how to approach an audit confidently and protect yourself at every stage.
Your Rights When You’re Audited
An audit is not just a financial review; it’s a legal proceeding. That means you have specific protections under the law, including:
- The right to professional representation: You don’t have to meet with the IRS alone. An attorney, CPA, or enrolled agent can handle all communications and attend meetings on your behalf.
- The right to be informed: The IRS must clearly explain why they’re auditing you, which year(s) they’re examining, and which items they’re reviewing.
- The right to appeal: If you disagree with audit findings, you have the right to appeal within the IRS or in U.S. Tax Court.
These rights are critical, and exercising them properly can help protect you from unnecessary penalties or an audit that expands beyond its original scope.
Common Audit Triggers
Even before you prepare documents, it helps to understand why your return was selected for audit:
- High-value deductions or credits that stand out compared to your income
- Repeated business losses, especially for self-employed taxpayers
- Cash-heavy business operations (restaurants, salons, construction)
- Income reporting mismatches (IRS records don’t match your return)
- Large charitable contributions relative to income
Even legitimate claims can raise questions. That’s why clear documentation is so important.
What Happens During an Audit?
Not all audits look the same. The IRS uses different formats depending on the complexity of your return:
- Correspondence audit:
Conducted entirely by mail. The IRS requests specific documents for review. - Office audit:
Requires you to appear at an IRS office and bring supporting documentation for review in person. - Field audit:
The most comprehensive — the auditor visits your home or business to examine records and ask questions directly.
Each format demands a tailored approach, and professional guidance is especially helpful for office and field audits.
How to Prepare for a Tax Audit
Proper preparation can mean the difference between a smooth audit and a stressful one. Here’s where to focus:
- Carefully review the audit letter: Identify what the IRS is questioning — not every item on your return will be under review.
- Gather and organize documentation: Receipts, invoices, bank records, mileage logs, and statements all serve as proof for deductions and income reported.
- Know your return: Even if you used a preparer, you should understand what’s being audited and why.
- Anticipate questions: The auditor may ask you to explain how you determined figures on your return — especially for deductions like a home office or business expenses.
A well-organized presentation of your records shows professionalism and cooperation and can help resolve the audit faster.
Best Practices During the Audit Process
When engaging directly with the IRS (whether personally or through your representative), remember:
- Only answer what is asked: Stay on topic and avoid offering extra information that could broaden the scope.
- Stay polite and professional: Treat the auditor with courtesy — but assert your rights when needed.
- Keep records of all correspondence: Document what you submit and any communications with the IRS for your records.
Audit Results: What to Expect
At the conclusion of the audit, the IRS will issue a report outlining their findings. The possible outcomes include:
- No change: Your return is accepted as filed.
- Agreement: You agree to pay additional tax based on the auditor’s findings.
- Disagreement: You disagree with the proposed changes and wish to challenge them.
If you disagree, you have several options, including requesting a meeting with an IRS appeals officer or pursuing your case in tax court.
Why Legal Representation Matters
IRS audits often involve legal questions as well as financial ones — especially when the audit becomes more complex or the auditor questions deductions or classifications that are open to interpretation.
An experienced tax attorney can:
- Communicate directly with the auditor on your behalf
- Ensure the audit remains focused on the original issues
- Help you provide appropriate documentation
- Protect your rights at every stage of the process
- Represent you in an appeal or tax court if necessary
Plan Ahead: Reduce Future Audit Risk
Even after your audit is complete, there’s value in improving your financial recordkeeping:
- Maintain complete records for at least 3–7 years.
- Separate personal and business expenses clearly.
- Avoid estimating figures — use documented amounts.
- Report all income sources, even small or irregular income.
Don’t Face an Audit Alone — McCauley Law Offices Can Help
An IRS audit can feel overwhelming, but you don’t have to go through it by yourself. Proper legal representation can protect your rights, minimize the scope of the audit, and help you achieve the best possible result.
At McCauley Law Offices, we specialize in helping individuals and businesses navigate audits confidently and effectively. Whether you’ve just received your audit letter or are already deep in the process, we’re ready to step in and help.
Call today for a free consultation — let us help you resolve your audit while protecting your rights, your assets, and your peace of mind.
