You just got an IRS audit notice. Here is what to do in the first 30 days

The letter arrives in the mail. Stamped envelope, IRS return address, a notice number in the upper right corner. The hands shake. The first instinct is to call the IRS immediately and explain. That instinct is almost always wrong.

How an audit unfolds is largely determined by what happens in the first 30 days — the responses, the documents, the conversations. The taxpayer who treats the first 30 days carefully sets a defensible record for the entire process. The taxpayer who answers everything in week one usually expands the audit scope, hands over documents that were not requested, and locks in positions that cannot be easily walked back later.

1. Identify which kind of letter you received

The IRS sends many different notices, and the response strategy depends entirely on which one you got. The notice number is in the upper right corner.

A CP2000 with a $3,000 proposed adjustment and a Notice of Deficiency on a $300,000 issue both feel scary in the moment. They require very different responses.

2. Read the response deadline carefully

Every IRS letter specifies a response window. Common ones are 30 days for examination correspondence, 60 days for some appeals processes, 90 days for a Notice of Deficiency. The deadline is a calendar date — often shown twice in the letter, just in case.

The deadline matters because missing it can lock in adverse positions, eliminate appeal rights, or cause the proposed assessment to become a final tax debt. The 90-day Notice of Deficiency window is statutory under IRC § 6213 — once it lapses without a Tax Court petition, you have lost the right to challenge the assessment in Tax Court entirely. Other forums (district court refund suit, for example) have different procedural requirements that are far more burdensome.

3. Acknowledge — but do not yet substantively respond

Within the first week, send a written acknowledgment. The acknowledgment can be brief: "This letter confirms receipt of your Notice [number] dated [date] regarding tax year [year]. We are reviewing the matters raised and will respond by [response date]." This does three things.

Do not call the IRS examiner during this first week to chat about the issues. Phone conversations can become part of the record without the taxpayer realizing it. Substantive engagement should come in writing, after preparation.

4. Read the notice for what is actually being asked

IRS audit letters are unusual documents. They tell you exactly what the auditor is examining, what years are at issue, and what specific items they want substantiation for. The scope is bounded by these specifics.

The most common audit-defense mistake is volunteering information about issues the IRS did not raise. The audit is about Schedule C deductions for 2023? Provide substantiation for those deductions for that year. Do not mention the home-office deduction unless asked. Do not provide bank statements for years not under examination. Do not narrate the entire business operation.

5. Gather substantiation for the actual issues

For the items the IRS is asking about, gather the supporting documentation. The standard for most deduction substantiation is contemporaneous records — receipts, mileage logs, calendars, bank statements, invoices.

Where contemporaneous records do not exist or are incomplete, the path forward is more nuanced. Reconstructed records can be acceptable, but they have to be defensible. The Cohan rule (from a 1930 case) sometimes allows estimated deductions, but it is heavily limited and not a substitute for actual records.

6. Decide whether to handle this yourself

For a small CP2000 mismatch under $5,000, self-representation is often fine. For a full Schedule C audit, a multi-year examination, or anything involving claimed depreciation, foreign accounts, cryptocurrency, or unreported income, the case for representation is much stronger.

The economics: a tax attorney typically charges $400 to $800 per hour. A modest representation engagement runs 8 to 30 hours. On a $50,000-stakes audit, even a small reduction in the proposed assessment more than covers the legal fee. On a $500,000 audit, the math is overwhelming.

7. Form 2848 — the power of attorney

When a tax attorney represents you, they file Form 2848 (Power of Attorney and Declaration of Representative). This form authorizes the IRS to communicate directly with the attorney, and importantly, instructs the IRS to stop communicating with the taxpayer about the matter except through the representative. From that point forward, the auditor calls the attorney, not you.

Form 2848 is short, but the entries on it matter. It specifies which years and which tax forms are covered by the representation. A poorly drafted Form 2848 can leave the taxpayer without representation on related issues that arise during the audit.

8. Track every contact

Every letter, every phone call, every fax, every email — log it. Date, time, person, topic, summary. This contact log is the spine of any later challenge to the audit process. It is also indispensable if the case proceeds to appeals or litigation.

IRS audits can run 6 to 24 months. Memory fades; logs do not. We require contact logs from every audit-defense client.

The 30-day checklist

If your audit notice arrived this week and you are not sure what to do next, the consultation is free and the conversation is confidential. We will tell you whether the case warrants representation and what the realistic outcome range looks like — including, when applicable, that you do not need a lawyer for what you are facing.