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You’ve filed your taxes, paid what you owe – or you’re waiting for that refund to hit your bank account. Some time down the road, a letter arrives from the Internal Revenue Service (IRS) saying you’ve been selected for an audit.

Take a breath.

“The first thing you need to do is read the letter,” said Benjamin Akins, JD, LLM, professor of legal studies and taxation at 91ԭ�� (GGC). “The letter will have all sorts of information about why you’ve received the letter, who the letter is from and a number you can call if you want to talk to someone to get more information. The IRS will never call you because they always begin the process by mail.”

The letter, Akins said, will help you figure out what you’re dealing with.

“Is this a small, quick correspondence audit? Is this something more involved like an office audit or is this a really involved field audit?” he said.

There are three kinds of audits.

“There's one that is very limited and not too intrusive called a correspondence audit and that's just the IRS wants to send letters back and forth with you about something very specific about one of your returns,” he said. “It’ll usually go away with just a couple of mailings back and forth.”

The second, he added, is an office audit.

“This is when the IRS says they need you to come into one of their local offices and have a conversation with them, which is a little scarier,” he said. “But it’s still fairly limited in what they’re looking for.”

The third audit, Akins said, is the field audit.

“This is much more serious and is used only in certain situations. For instance, it might be necessary in a situation where the auditors need to get a feel for how the business is actually operating. Coming to the taxpayer’s location might be the only way to get the full picture."

What could trigger an IRS audit? Akins said that things like very large deductions, such as charitable donations or business expenses can trigger an audit. Also, something called information mismatching can get the IRS’s attention.

“Remember that the 1099 and W2 forms that you receive are also sent to the IRS,” said Akins. “If the information from those documents and what you file don’t match, it can trigger an audit.”

All tax returns are run through the IRS Discriminant Function, a computer program that scores tax returns based on their potential for errors.

“This function assigns a score to your return based on how it looks compared to the returns of similarly situated taxpayers,” said Akins. “If you get a high score, then your return is flagged for a potential audit.”

Once you have received and read the letter from the IRS, Akins said there are steps you should take right away.

“Start gathering your records. One thing people need to know is that audits are not accusations that you’ve done something wrong,” he said. “They’re just requests that you verify things that you voluntarily told the government. We have a voluntary compliance tax system where the government just takes our word for what we say and occasionally they have questions. Audits are just their way of asking questions and wanting you to show your justification for the numbers you put on your return.”

Many audits, Akins said, can be handled yourself.

“The more organized you are with your files, the less anxiety you’ll have,” he said. “I think what causes the most anxiety for people is the fear they may owe more money or have done something wrong.”

If the IRS finds that you do owe more money, they will send what Akins called a 30-day letter toward the end of the audit process.

“Essentially, you have a month to either agree to pay what the IRS says you additionally owe or to go through the appeals office, which is an independent division of the IRS.”

If you lose the appeal, Akins said, you should expect one final letter.

“After the audit closes, you will receive the 90-day letter, which tells you the audit is over and you have 90 days to either pay or file suit against the IRS in tax court,” he said. “There are actually multiple court systems available to you to fight the IRS’s audit decision, but the tax court is the only one that allows you to fight the case without having to pay the tax deficiency first.”

Akins also mentioned that the Taxpayer Advocate is “an independent group within the IRS that is there to assist taxpayers with financial hardships that arise during the audit or when communication with the IRS has broken down.”

Akins has first-hand experience of the IRS audit process.

“It was back in 2012 when I received one of those audit letters for an office visit,” he said. “It was about charitable donations and they wanted me to substantiate them. I keep very good records, so it was a matter of gathering them together and showing them the documentation. In the end, I received a letter that the audit was closed and I went about my day.”

Akins added a few quick tips for taxpayers.

“Keep good records, and the conventional wisdom is to keep your tax records for about seven years,” he said. “The IRS has three or so years to audit most returns. So, if you file your 2025 return in April of this year, the IRS will likely have until April 2029 to audit that return.” He cautioned that the IRS could have up to six years to audit a return in situations where a taxpayer has “substantially underreported their income.”

In the end, Akins said most audits are civil matters.

“By and large, audits are civil matters – not criminal,” he said. “You’re not worried about your liberty being at stake. Those high-profile criminal cases involving tax evasion are not typical.”