What Does An IRS Audit Letter Look Like? Plus, How To Spot A Fake IRS Letter

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IRS letter with cash laying on top.
Can you spot the difference between an actual IRS letter and a scam?
Image credit: Susan B Sheldon, Shutterstock

We all have some unlikely but “could-happen” fears. As an independent contractor, I watch my finances like a hawk, but you never know when the Internal Revenue Service (IRS) will come calling. One of my biggest fears is being audited by the IRS, even though it only happens to less than 1% of taxpayers each year.

At the same time, I’ve heard of several scams that claim to be the IRS contacting taxpayers for multiple reasons. Scammers have sophisticated ways to capitalize on our IRS-induced panic. That’s why it’s so crucial to know how to tell if an IRS letter is real. I’ll help you determine if you’re the subject of a scam or if you actually are being contacted by the IRS for an audit.

How To Tell If An IRS Letter Is Real

An IRS audit is a review/examination of an organization’s or individual’s accounts and financial information to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct.

Internal Revenue Service

The IRS only contacts taxpayers initially by mail and never via a phone call or email. An IRS audit letter arrives in your mailbox in an official IRS audit letter envelope. The return address on the envelope indicates that it’s a letter from the Department of Treasury, Internal Revenue Service. Also, the notice is on official IRS letterhead.

An authentic IRS audit letter lists your full name, tax ID number (EIN) or social security number, notice number, IRS contact information, and often your IRS ID number. The notice will clearly state the reasons for a review and audit, and the year the taxpayer filed the return. It will also provide instructions, including what additional information, clarification, or documentation they need to complete the process. Finally, the notification will give a deadline for responding to the IRS’s request.

What Does An IRS Audit Letter Look Like?

The image below is an example of what an IRS audit letter looks like. It includes all of the official elements, including what the IRS action is for and how to respond.

IRS letter CP75A sample.
Caption: A sample CP75A Audit Notice courtesy of TaxAudit.

What Does An Official IRS Envelope Look Like?

Here’s the image of an envelope that I received from the IRS recently. (Sadly, it was not a refund.)

IRS envelope example.
IRS envelopes always include “Official Business Penalty for Private Use” in the top left corner.

Where Do IRS Audit Letters Come From?

A majority of audit and other IRS notices come from the Department of Treasury. However, letters pertaining to small business audits may not list the Department of Treasury on the envelope or letterhead; rather, they may say “Internal Revenue Service, Small Business and Self-Employed.” These notices still have official letterhead. The city and state of any IRS notice can vary depending on which IRS office issued the letter.

7 Tips On How To Spot A Fake IRS Letter

Scammers know that many people don’t think clearly when faced with contact by the IRS — and they take advantage of our apprehension. So, be on the lookout for IRS letter scams. Here are some signs and tips to identify a fake IRS letter.

  1. IRS envelopes always include in the top left corner “Official Business Penalty for Private Use.” If this is missing, you likely have a scam letter.
  2. The IRS uses window envelopes that show the top fold of your letter, which includes the IRS logo and your name and address. 
  3. The letter lacks the IRS logo.
  4. IRS letters contain a link to the specific IRS webpage explaining the notice. For example, if you receive a CP75A notice, the letter will include “Visit IRS.gov/cp75a.” Fake letters may not contain this.
  5. Fake IRS letters ask for your personal information, including bank information, routing number, social security number, etc. The IRS never requests this information.
  6. Fake IRS letters often include high-pressure language demanding immediate payment.
  7. The IRS only asks you to pay via your bank account, credit or debit card, or by check. Fake letters often request payment by alternative methods like prepaid cards or gift cards. Also, the IRS directs you to make checks out to the Department of Treasury. Any other requests are a scam.

TIP: Before picking up the phone, always confirm phone numbers and contact information on any letter you receive by visiting the IRS website. The video below from NBC 5 Chicago explains why based on a 2023 mail scam making the rounds.

Types Of IRS Audit Letters & Required Actions

An IRS audit letter indicates that your tax return is under review. The IRS sends out various types of audit letters with the corresponding notice or letter codes. (Although, not all audit notices actually include the word “audit.”) Each code is specific to the type of audit, the issue at hand, and the action needed.

Correspondence audits are the most common type of IRS audit. Most of these are fairly simple to address by mail. Here are a few examples of actions you may need to take.

  • Provide additional records such as employment documents, receipts, legal records, loan agreements, etc.
  • Make an additional payment based on discrepancies between what you reported and the information the IRS has on file
  • Provide missing information or signatures on your tax forms

IRS examination letters are typically more comprehensive and complex. While some cases can be handled by mail, many require an office audit or field audit. With an office examination, you’ll meet in person at a local IRS visit. A field exam involves an IRS representative visiting you at your place of business or residence.

What Triggers An IRS Audit?

Most tax returns pass through the system without any red flags, but the IRS pulls some for closer examination. Many issues can trigger an audit, and some aren’t due to suspicious returns. Here are some of the most common factors that trigger an IRS audit for individuals, those who are self-employed, and small businesses.

Math Errors

Be sure to double-check all of your figures and computations carefully. A simple math error may not trigger an audit, but it could result in the IRS investigating your entire return more closely. Using tax preparation software can help avoid easily avoidable mistakes. See our reviews of the best tax software for individuals and small businesses.

Income Inconsistencies

The Internal Revenue Service’s computerized system matches all pertinent income forms it receives from employers or financial institutions (1099s, W-2s, K-1s, etc.) with the income you report on your return. If the numbers don’t match, you’ll likely receive a CP2000 audit notice. Common types of unreported income that may trigger an examination include cash tips, freelance income, investment earnings, dividends, and more.

Excessive, Unqualified, Or Unusual Deductions

The IRS has very specific rules about tax deductions for self-employment or small business expenses. These rules apply to everything from home office space and mileage deductions to office equipment/supplies and meals. Your return may trigger an audit if your deductions exceed qualifying amounts or are unqualified. Also, reporting large donations to charitable organizations compared to your income may be a red flag. See my guide on self-employment tax deductions to learn more.

Claiming Too Many Losses

If you’re a small business owner, you know you can have good and bad years. However, if you have reported losses on Schedule C year after year, the IRS may question whether you have a profit-making business or more of a hobby. A pattern of losses may raise a red flag. Be sure to read IRS Publication 334, a comprehensive tax guide for small businesses.

Random Selection

A random selection doesn’t mean you’ve done anything wrong. Sometimes the IRS selects returns based solely on a statistical formula. They compare your tax return against “norms” for similar returns. 

Frequently Asked Questions

Below are a few of the most common questions people ask about audit notices from the Internal Revenue Service. If we haven’t answered yours, please ask us in our comments.

Are IRS Audit Letters Sent Certified?

Typically, the first notice you receive about an audit comes in the regular U.S. Postal Service mail. However, in some cases, you may receive it by certified mail.

What If I Don’t Understand The Notice?

First, go to the IRS website to search notices and letters. Here, you enter the notice code at the top right of your letter. For each code, the website has a full explanation of what the notice is about and details on what you need to do. Another great source is the Taxpayer Advocate Service (TAS), an independent organization within the IRS.

You can also make an appointment at your local IRS Taxpayer Assistance Center or seek assistance from a tax professional, such as an attorney or certified public accountant.

Are IRS Audit Notices Available Online?

You will always receive a notice by mail and can look up audit notice types on the IRS website, but you can’t view your personal notice online. However, the IRS has a relatively new upload feature on their site for nine notices to make it easier for you to provide requested documents. For audits, these include CP06A, CP75A, and CP75D.

What Happens If You Ignore An Audit Letter?

Ignoring an IRS audit notice typically results in an assessment of additional taxes, interest, and penalties. If you continue to ignore subsequent IRS notices, you’ll likely lose your right to dispute your case. With serious issues like tax evasion or fraud, you could also face the possibility of jail time.

How Do I Respond To And Prepare For An IRS Audit?

Facing an audit is an incredibly stressful experience, but knowing what to expect and being prepared can help relieve a bit of your anxiety. See our guide on what happens when you get audited and how you can get prepared. And if you feel that you need professional help, check out our reviews of top online tax services all of which provide some sort of audit defense.

Have you ever been audited by the IRS? If you feel comfortable sharing your experience, please add your insights for others going through this process in our comments.

Why Trust We Rock Your Web?

Sally has years of experience in financial communications for various organizations and foundations. She also works with a team of experts at Safe Smart Living, who are diligent in researching the ideal ways to handle personal and small business finances. Our team is committed to sharing our extensive knowledge with you, our readers, to help you keep your hard-earned money safe and secure.

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