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Finance Forward Blog

How Does an IRS Audit Work?

IRS Timeline Audit Process

The Unpredictable Nature of IRS Audits

Receiving an IRS audit notification can understandably raise concerns about what lies ahead. One common question is: How long will this process take? The reality is that there's no definitive answer, as the duration can vary considerably depending on several factors. However, being informed about potential timeframes can help set realistic expectations.

Key Factors Impacting Audit Duration

The length of time an IRS audit takes is influenced by a variety of elements, each playing a role in determining the overall timeline. Here are some of the most significant factors:

The Audit Type

The IRS conducts different types of audits, each with varying levels of depth and scrutiny. The three primary categories are:

  1. Correspondence Audit: The most common and typically quickest form, handled entirely through the mail. The IRS requests specific documentation to verify items on your return.

  2. Office Audit: This requires an in-person meeting with an IRS agent, usually at an IRS office. More comprehensive than a correspondence audit.

  3. Field Audit: The most extensive type, involving an IRS agent visiting your home, business, or accountant's office to examine records in detail. Field audits are typically the most lengthy.

Understandably, the more exhaustive the audit type, the longer it tends to take to complete.

Case Complexity

The more intricate your tax situation, the more time the IRS will likely need to review and analyze the relevant information. Cases involving complex business structures, international transactions, or substantial documentation often necessitate a more prolonged audit process.

Your Responsiveness

How promptly and thoroughly you (or your tax professional) respond to the IRS's requests for documentation and information can significantly impact the audit's timeline. Delays or incomplete responses can prolong the process, while timely cooperation can help expedite its completion.

IRS Resources

The IRS's workload and available resources can also influence audit timelines. During periods of high demand or staffing constraints, audits may take longer due to backlogs and limited personnel.

Potential Timeframes (But No Guarantees)

While every audit is unique, here are some general timeframes to consider, though they are by no means guaranteed:

  • Correspondence Audits: Often resolved within 3-6 months.

  • Office Audits: Frequently take 6 months to a year or more.

  • Field Audits: Commonly last 1-2 years, but can extend beyond that for particularly complex cases.

Keep in mind that these are just estimates, and your specific audit could be resolved more quickly or take longer, depending on your specific situation.

Next Steps

If you are going through the audit process, organization and communication will aid you well. We recommend gathering and organizing all relevant documentation, responding promptly to any IRS requests, and maintaining open lines of communication with your tax professional or the assigned IRS agent.