What Type of Documentation Will I Need in an IRS Audit?

So when you get your initial audit notice, there's usually an information document request that is attached to that notice or you'll be instructed to contact the auditor and they'll send you a document request based on that initial conversation. Document requests generally swing one of two ways: there are the document requests where the auditors put time and thought into it and then there are document requests that serve as what we call "fishing expeditions" where they just throw everything in the kitchen sink into the document request. Generally speaking, audits are focused on one of two things. They're either income side audits or they're expense side audits because typically people will either under report income or they overstate expenses but they won't do both. If you see a document request that contains income items and expenses, it could be a sign that the auditor is engaging in a fishing expedition or it could be that they genuinely want to see both your income and your expenses depending on why your return was selected for audit which the auditor may or may not tell you. That'll be a good indication of what they're going to ask for. For example, most people if I ask them honestly probably could tell me why they think their return was selected for audit because the returns that get selected for audit usually contain some method of error and most clients deep down are generally aware of it. There might be some cause for concern but generally speaking the IRS is going to be focused on the substantiation of expenses. They're going to be focused on substantiation of income and some interplay between those two and that'll give you an idea of what documents you're going to be asked to provide.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law