What Shawano, WI Residents Should Know About an IRS Audit

An IRS audit is a review of a tax return to determine whether income, deductions, credits, and other information were reported accurately. Receiving an audit notice does not automatically mean the return contains an error or that the taxpayer did anything dishonest. The IRS selects returns through computerized screening, document matching, random sampling, and other methods. Many audits end with no change to the return. ([irs.gov](https://www.irs.gov/publications/p556?utm_source=openai))

What does an IRS audit involve?

An audit, also called an examination, is the IRS process for reviewing information reported on a federal tax return. The agency may ask for records supporting particular items, such as wages, interest, business income, charitable contributions, medical expenses, education credits, or deductions connected to a home or rental property.

An examination is not the same as a collection notice. An audit focuses on whether the tax return is correct. A collection notice concerns an amount the IRS says is already due and unpaid. The two issues can overlap if an audit results in additional tax, penalties, and interest.

How will the IRS notify me?

The IRS generally begins an audit by sending a written notice. The notice should identify the tax year under review, the items being questioned, the records requested, and the response deadline.

Most individual audits are handled in one of three ways:

• Correspondence audit: The taxpayer responds by mail or through an IRS document-upload system.
• Office audit: The taxpayer meets with an IRS employee, generally at an IRS office or through another method described in the notice.
• Field audit: An IRS employee conducts a more detailed examination, often involving a business, rental activity, or complex financial records.

A legitimate IRS audit begins with written communication. Unexpected calls, text messages, emails, or social media messages demanding immediate payment should be treated cautiously. The notice itself should be reviewed carefully, and contact information should be verified through official IRS resources rather than relying only on information provided by an unsolicited caller.

What should I do after receiving an audit notice?

Read the entire notice before sending records. The first practical step is to identify the exact tax year, disputed items, deadline, and preferred response method.

Create a working file containing:

• A complete copy of the filed tax return
• The IRS notice and every later letter
• Forms W-2, 1099, mortgage-interest statements, and other income records
• Bank statements, receipts, invoices, mileage records, and canceled checks
• Documents supporting credits, dependents, charitable gifts, or education expenses
• A written explanation connecting each document to the tax return

Only provide records relevant to the issues listed in the notice unless the IRS specifically requests additional information. Send copies rather than irreplaceable originals, and keep proof of delivery or electronic submission.

For households dealing with winter weather, seasonal employment, home maintenance, farming-related income, rental activity, or irregular business expenses, records may be spread across paper files, online accounts, and bank statements. Reconstructing documentation early is usually easier than trying to locate it immediately before a deadline.

How should I respond to the IRS?

A response should be organized, factual, and limited to the questions raised. A useful format is:

1. Identify the tax year and IRS notice number.
2. Address each questioned item separately.
3. State whether the amount on the return is correct.
4. Explain the facts briefly.
5. Attach numbered copies of supporting documents.
6. Keep a complete copy of the submission.

If a receipt is unavailable, do not create a replacement document or guess at an amount. Explain what happened and provide other reliable evidence, such as bank records, invoices, calendars, contracts, or third-party statements. A missing receipt does not automatically determine the result, but unsupported estimates may be difficult to defend.

Missing the response deadline does not make the taxpayer’s position automatically correct or incorrect. It can, however, limit the opportunity to explain the return before the IRS issues a proposed adjustment. If more time is needed, the notice should be reviewed for instructions on requesting an extension.

What happens after the IRS reviews the records?

The audit may end in one of three general ways:

• No change: The IRS accepts the return as filed.
• Refund or reduced liability: The review determines that the taxpayer is entitled to a lower tax amount or refund.
• Proposed changes: The IRS believes additional tax, penalties, or interest may be due.

If the IRS proposes changes, the taxpayer typically receives an examination report or similar letter explaining the adjustments. The taxpayer can agree, disagree, or sometimes provide additional information before the assessment becomes final.
Agreeing to a proposed change generally means accepting the tax adjustment and arranging payment if money is owed. If payment is not possible in full, IRS payment options may be available, but a payment problem is different from disputing whether the tax is correct.

Can an IRS audit be appealed?

Yes, many audit disagreements can be reviewed through the IRS Appeals process. A taxpayer who disagrees should follow the specific appeal instructions and deadline in the notice. The IRS generally requires a written protest or, in some smaller cases, a simplified request using Form 12203. For examination cases, a small-case request may be available when the total proposed additional tax and penalties for each tax period are $25,000 or less. ([irs.gov](https://www.irs.gov/appeals/preparing-a-request-for-appeals?utm_source=openai))
The appeal should explain which adjustments are disputed and why. Supporting facts, calculations, and documents matter more than general statements that the result feels unfair. Appeals is intended to be independent from the IRS office that conducted the examination, and conferences may occur by correspondence, telephone, video, or in person. ([irs.gov](https://www.irs.gov/about-irs/appeals-at-a-glance?utm_source=openai))
Deadlines are critical. The IRS states that the time limit for requesting an appeal is generally 30 days from the date of the letter offering appeal rights, but the notice controls. A taxpayer should not assume that mailing a general disagreement automatically preserves appeal rights.

What is audit reconsideration?

Audit reconsideration is a process that may allow the IRS to review an audit again when the taxpayer disagrees with the result and the liability remains unpaid. It may be useful when the taxpayer did not respond originally, moved and did not receive the notice, has new documentation, or believes the IRS made a processing or calculation error. ([irs.gov](https://www.irs.gov/credits-deductions/audit-reconsideration-process-for-correspondence-examination-audits-by-mail?utm_source=openai))
A reconsideration request should identify the disputed adjustments and include copies of new or previously unsubmitted records. The taxpayer should also include the audit report, often Form 4549, if available. If the full assessed amount has already been paid, audit reconsideration generally is not the correct procedure; a formal refund claim may be required instead. ([irs.gov](https://www.irs.gov/credits-deductions/audit-reconsideration-process-for-correspondence-examination-audits-by-mail?utm_source=openai))

What rights does a taxpayer have during an audit?

The IRS Taxpayer Bill of Rights includes the right to be informed, the right to quality service, the right to pay no more than the correct amount of tax, the right to challenge the IRS’s position and be heard, and the right to appeal