IRS Field Audit Response

What a Field Audit Means

A field audit is the most comprehensive IRS examination. An IRS revenue agent conducts the audit at your place of business or your accountant's office. Field audits typically involve business returns, complex financial transactions, or high-income individual returns.

Field audits examine multiple years and often review entire business operations, accounting methods, and internal controls.

Why You Were Selected

Field audits are typically triggered by:

• Substantial business income or significant deductions
• Unusual transactions or cash-intensive businesses
• Discrepancies between business and personal returns
• Participation in abusive tax schemes
• Related party transactions or international activities
• Prior audit findings or compliance history

Field audits require significant preparation and professional assistance is strongly recommended.

What NOT to Do

• Do not allow the examiner unsupervised access to your business premises
• Do not permit the examiner to interview employees without your presence
• Do not volunteer records beyond what is specifically requested
• Do not agree to Information Document Requests (IDRs) without review
• Do not sign agreements or waivers without understanding their consequences
• Do not proceed without professional representation

What to Do Next

Review the audit notice carefully to understand the scope of examination. Organize financial records, accounting ledgers, bank statements, and supporting documentation for the years under review. Prepare written explanations of business operations, accounting methods, and unusual transactions.

Designate a professional representative to handle communications with the IRS. Provide requested documents in an organized manner. Maintain a log of all documents provided during the examination.

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