What are your rights during an IRS audit?

You have the ten rights in the Taxpayer Bill of Rights, which the Internal Revenue Code requires IRS employees to follow, plus specific protections for audit interviews. You can be represented, you can stop an interview to consult your representative, you can audio record an in-person interview if you ask in advance, and you can appeal a result you disagree with, first within the IRS and then in court.

Knowing these rights changes how an audit feels. It does not mean refusing to cooperate; it means answering what was asked, through the right person, on a record you control. This page is part of Kathryn Meyer's guidance on IRS audits and examinations. It builds on the overview in understanding the IRS audit process.

How to use your rights as an audit unfolds

1. When the letter arrives. Publication 1 says a mail examination can be answered by mail, or you can ask for a personal interview. Either way, you are entitled to know why the information is requested.
2. Before any interview. Decide who will speak for the business or household, sign a power of attorney if a representative will attend, and send any written request to record at least 10 days ahead.
3. At the first interview. The examiner must explain the audit process and your rights; you or your representative can ask to stop and consult at any time outside a summons interview.
4. During the audit. Answer each request in writing, keep a copy of everything sent, and ask for the list of any third parties contacted.
5. At the end. The examiner must explain proposed changes; you can meet the supervisor, then appeal, then go to court.

Where do these rights come from?

Section 7803(a)(3) of the Code directs the Commissioner to ensure that IRS employees are familiar with and act in accord with taxpayer rights, and it lists ten: the right to be informed, to quality service, to pay no more than the correct amount of tax, to challenge the IRS's position and be heard, to appeal in an independent forum, to finality, to privacy, to confidentiality, to retain representation, and to a fair and just tax system. IRS Publication 1, Your Rights as a Taxpayer, explains each one.

For audits, the IRS summarizes the practical core this way: professional and courteous treatment, privacy and confidentiality, knowing why the IRS is asking for information and how it will be used, representation by yourself or an authorized representative, and appeal of disagreements both within the IRS and before the courts.

What are your rights in an audit interview?

Section 7521 sets the ground rules for in-person interviews about the determination or collection of tax:

• An explanation first. Before or at the first in-person interview, the IRS must explain the audit process and your rights in it.
• Recording. If you ask in advance, the IRS must let you make an audio recording at your own expense and with your own equipment. IRS Publication 556 says to make the request in writing and notify the examiner 10 days ahead. The IRS may record too, but it must tell you beforehand, and if you ask, it must give you a copy or transcript as long as you pay the cost.
• Stopping to consult. If you clearly say at any point that you want to consult an attorney, certified public accountant, enrolled agent or other person permitted to represent you, the interview must be suspended, even if you have already answered some questions. This does not apply to an interview you are attending because of an administrative summons.
• Sending a representative instead. A representative holding your written power of attorney can attend for you, and absent an administrative summons, the IRS may not require you to come along.

One limit matters a great deal: section 7521 does not apply to criminal investigations. If there are signs that a civil audit may be heading in that direction, the protections and the strategy change; see the warning signs that a civil IRS audit could turn criminal.

Your audit rights at a glance

Can the IRS talk to your bank, clients or employer?

It can, but not by surprise. Under section 7602(c), the IRS generally may not contact anyone other than you about your tax liability unless it has sent you a notice, at least 45 days before the contact period begins, that it intends to make third-party contacts during a period of up to one year. It must also give you a record of the people it contacted, periodically and whenever you ask. The rule does not apply to contacts you authorize, where notice would jeopardize collection or risk reprisal, or to a pending criminal investigation. How those contacts work, and how a summons to a third party can be challenged, is explained in whether the IRS can contact your bank, clients or employer during an audit.

Publication 1 adds that the IRS will generally deal directly with you or your authorized representative, and when it does contact others, the law limits what it may disclose to what is necessary to get or verify the information. It also explains that the IRS turns to others when it needs information you have not been able to provide, or to verify information it has received, so providing records promptly can reduce the need for outside contacts.

What about the time, place and scope of the audit?

Publication 1 says you can ask that an in-person examination take place at a reasonable time and place that is convenient for both you and the IRS, and Publication 556 notes that you can ask to move the case to another area, for example where your books are kept, though the IRS makes the final call. If the IRS examined the same items in either of the two previous years and proposed no change, Publication 1 asks you to contact the IRS so it can consider ending the repeat examination.

You also have the right to privacy, which the IRS describes as an expectation that any examination will comply with the law and be no more intrusive than necessary. That right pairs well with a disciplined response: answering the request that was made, completely, rather than volunteering material that widens the audit.

Are your conversations with an adviser protected?

Communications with an attorney for legal advice are protected by the attorney-client privilege. Section 7525 extends similar protection to tax advice from other federally authorized tax practitioners, such as CPAs and enrolled agents, but only in noncriminal tax matters before the IRS and noncriminal tax cases in federal court. That difference becomes important when an examination raises questions of intent.

What if you disagree with the result?

You can ask to speak with the examiner's manager, and you can appeal to the IRS Independent Office of Appeals, which the Code establishes as independent from the examination function; see what happens at an IRS Appeals conference. Publication 1 also notes that if you go to court, the IRS has the burden of proving certain facts if you kept adequate records, cooperated, and meet other conditions, and that a taxpayer who wins on most issues against a position that was largely unjustified may be able to recover some administrative and litigation costs.

What changes the answer

• A summons interview. The right to stop and consult does not apply to an interview started by an administrative summons, and the IRS can then require you to attend in person (section 7521(b)(2), (c)).
• A criminal investigation. Section 7521 does not apply to criminal investigations at all, and the section 7525 privilege for non-attorney practitioners covers only noncriminal matters.
• Exceptions to third-party notice. Advance notice is not required for contacts you authorize, where notice would jeopardize collection or risk reprisal, or during a pending criminal investigation (section 7602(c)).
• A representative who stalls. With a supervisor's consent, the examiner may tell you directly that your representative is causing unreasonable delay (section 7521(c)).
• Your records and cooperation. In court, the burden of proof on a factual issue can shift to the IRS only if you substantiated the item, kept the required records and cooperated with reasonable requests (section 7491(a)).

For example: an interview that goes off track

For example, imagine a small business owner who attends an office interview alone about her travel deductions. Halfway through, the examiner starts asking about cash receipts from years ago, a topic the letter never mentioned. She says clearly that she wants to consult an attorney. Under section 7521(b)(2) the interview must be suspended, even though she has already answered some questions. Her attorney then files a Form 2848, attends the next interview in her place, and answers the cash questions in writing after reviewing her records. Because there was no summons, the examiner cannot require her to come along. This is a hypothetical, not a real case.

Common mistakes about audit rights

• Thinking a request to consult a lawyer looks guilty. It is a statutory right the IRS must honor.
• Asking to record on the day. The request has to be made in advance; Publication 556 says in writing, 10 days ahead.
• Volunteering records beyond the request. Answer what was asked, fully, and let the scope widen only if the IRS widens it.
• Assuming the CPA privilege covers everything. Section 7525 does not reach criminal matters.
• Not asking for the third-party contact list. You can ask by phone, in writing or during an interview.

What to do this week

1. Read the audit letter and write down the years, the items and the response date.
2. Decide whether you want a representative to attend instead of you, and sign Form 2848 if so.
3. If you plan to record an interview, send a written request at least 10 days before it.
4. Gather the records for only the items listed; our audit consultation checklist shows what to bring.
5. Check whether the same items were examined in either of the two previous years with no change, and if so tell the IRS.

Frequently asked questions

Does being audited mean the IRS thinks you were dishonest?

No. Publication 1 says that an inquiry or examination does not suggest dishonesty, and that it may end with no change or even a refund.

Can you complain about how an examiner treats you?

Yes. The right to quality service includes speaking to a supervisor about inadequate service, and Publication 1 lists the Treasury Inspector General for Tax Administration for reporting employee misconduct.

What if you cannot afford a representative?

The right to retain representation includes seeking help from a Low Income Taxpayer Clinic, which Publication 1 describes as independent of the IRS, if you qualify.

Who can help if the audit is causing financial hardship?

Publication 1 points to the Taxpayer Advocate Service, an independent organization within the IRS, when a tax problem is causing hardship or has not been resolved through normal channels.

Do the same rights apply once the case is in collection?

Largely, yes. Section 7521 covers interviews about collection too, and the right to privacy includes a Collection Due Process hearing where it applies; see what a Collection Due Process hearing is and when to ask for one.

Can you get your costs back if you win in court?

Possibly. Publication 1 says a taxpayer who wins on most issues against a largely unjustified IRS position may recover some costs, but only after trying to resolve the case administratively, including Appeals.

Using your rights well

Most of these rights work best when exercised early, before the first interview or the first document production. Kathryn Meyer spent more than two decades in the IRS Office of Chief Counsel. She can step in as your representative under a Form 2848 power of attorney so the examiner works through her. Contact the firm or call (571) 560-8674.

Sources

• 26 U.S.C. 7803, Commissioner of Internal Revenue; other officials (taxpayer rights, Independent Office of Appeals)
• 26 U.S.C. 7521, Procedures involving taxpayer interviews
• 26 U.S.C. 7602, Examination of books and witnesses (third-party contacts)
• 26 U.S.C. 7525, Confidentiality privileges relating to taxpayer communications
• IRS, Taxpayer Bill of Rights
• IRS Publication 1, Your Rights as a Taxpayer
• IRS Publication 556, Examination of Returns, Appeal Rights, and Claims for Refund
• IRS, IRS audits
• IRS, About Form 2848, Power of Attorney and Declaration of Representative