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10 Documents you’ll need for an IRS tax audit.


It’s a nice breezy day. You pick your mail up, excited because that vintage Captain America comic you ordered came in today. But, alas, instead of nerding out all afternoon, you find yourself under the covers, stressing out over a fast-approaching audit of tax your returns. Receiving a tax audit notification in the mail can be a jarring experience, especially if you spend weekends embezzling a buck or two. Fret not, for a tax audit isn’t a death sentence. In fact, if you generally avoid criminal activity, you’ll probably be fine. Okay, you’ll be fine.

What is a tax audit?

A tax audit is a formal examination into your tax returns by the IRS to either verify information or uncover fraud or inaccurate tax returns. The IRS conducts these examinations both randomly and on purpose. If they decide to investigate your financial records randomly, they will just take a closer look to verify that all the information provided is correct. However, if the IRS suspects that there are any errors or that you weren’t entirely truthful while filing your returns, they will come at you with all they’ve got. Hard.

Audit notification letters are mailed for a couple of reasons;

  • You have a balance due.
  • The IRS has questions about your tax return.
  • You have a large or smaller refund due.
  • The IRS needs to verify your identity.
  • Additional information about your finances is needed by the IRS.
  • The IRS changed your tax return.
  • You are being notified of delays in processing your return.


What do I do now?

It’s good you asked that. After you’re done hyperventilating, sit down and read the notification letter the IRS sent you very carefully. In it are a few details you have to know to get through the audit smoothly. It will inform you of why you’re being audited, the specific steps you need to take and the date by which you have to send your reply. Take this time to gather all the relevant financial and non-financial documents and prepare yourself to respond to the IRS. If you need more time, you can submit a written request for a 30-day extension by mail or fax. If you received a Notice of Deficiency, the IRS will not grant you an extension.

Here’s what you need when you’re being audited.

Handling an IRS audit can be stressful, especially if you don’t have all the necessary documents. You’ll need them to prove that what you claimed in your return was true. Having all the relevant paperwork will save you tones of stress and time. So, once you gather your wits and start making preparations for the audit, make sure you collect and come equipped with these documents;

1.   Bills.

You’ll need to provide documentation for the bills you incurred during the period in question. You could either present the bills you paid through credit card, debit card, and ATM receipts. Actual bills for which you claimed deductions should also be presented.

2.   Loan agreements.

For loan agreements, a variety of documents are required. Start with mortgage loan documents associated with your home, and any documents associated with a second home. Any paperwork associated with personal, business, and car loans may also be required even if the loans are already paid.

3.   Receipts.

Life, huh? Your never liked when your parents wanted to know where you spent your allowance. But now, you not only have to tell but also show the IRS how you spent your money. So make sure you keep your credit card and bank account records, receipts from any retail purchases, and donations to charitable organizations. It might seem like overkill to keep each and every receipt you get, but trust me, you’ll thank me later.

4.   Canceled checks.

Make sure you keep canceled checks from the purchase of a house or any fees associated with renovations or the sale of a home. If you contribute to an Individual Retirement Account (IRA), any canceled checks from the contributions should be included. You might also be asked about any canceled checks you used to make tax payments, any contributions to a charity and alimony for at least the past seven years.

5.   Employee Documents.

People who find themselves victim to a deliberate IRS tax audit are usually employers, or at least, bigwigs in corporations. Make sure any information associated with continued education, dress codes, or W-2 reimbursement policies or statements and any other relevant employee documents are filed and stored safely.

6.   Legal papers.

While bringing every legal document you own might seem like a smart move, it would be advisable just to prepare the ones most relevant to your case. It’ll save you time and space too. So, be sure to include divorce settlements, custody agreements, property, and any documents on civil or criminal defense. Paperwork associated with tax preparation should also be included.

7.   Medical and Dental Records.

Again, the IRS wants to know how you spent your money. Nosey guys, huh? Anyway, you’ll have to bring any doctor’s notes, prescription charges, or any contracts for live-in attendants. There’s no specific set of documents needed here, so just make sure all your medical records are in order.

8.   Logs.

The IRS will need to see your travel logs if you claim tax deductions on mileage. Make sure you keep a trip log of all your business, medical, moving or charitable purposes. Plus, if you’re a gambling man, and you write off your winnings and losses, a log of all those will be required.

9.   Tickets.

While you’re keeping a log of all your travels, don’t forget about the tickets. Tickets and receipts from business trips may be required, so make sure you do not dispose of them.

10.                Theft or lost documents.

Should you find yourself suffering theft or loss of any sort, keep any documents related to the incident close to you. They may include insurance reports and payouts.


Get Help

So, there you have it. The IRS may sometimes be a frothing beast, but present it with these documents, and my, won’t you see that tail wag. And just like all matters tax, contact a knowledgeable tax attorney to guide you through the entire ordeal. At Ayar Law, we offer you free, no-obligation tax advice. Call us today at 800.571.7175 to have all your tax problems sorted.

Venar Ayar, Esq.

Venar Ayar, Esq.

Attorney-at-Law, Master of Laws in Taxation
Principal and founder, Ayar Law

Venar is an award-winning tax attorney ranked as a Top Lawyer in the field of Tax Law. Mr. Ayar has a Master of Laws in Taxation – the highest degree available in tax, held by only a small number of the country’s attorneys.