Receiving a written notice from the IRS may trigger feelings of fear or concern. Receiving an IRS audit letter in particular can be a scary experience. What's in an IRS audit letter? Can you do anything about an impending audit? What should you do if you disagree with the findings in an audit letter? 

What's in an IRS Audit Letter?

An IRS audit letter generally includes a written explanation of the reason for the audit. It may detail the specific tax issue that has been raised and how your return triggered an audit. The notice also describes how to appeal the audit findings and what you need to do to complete the audit.

When you read the audit letter, you'll also see the specific tax year for which the audit applies. If you've already completed an IRS audit and you receive another notice, your document may contain the audit results and the amount of additional tax due, if any.

How to Handle an IRS Audit Notice

While it may be natural to panic upon receipt of an IRS audit notice, try to remain calm and read the notice thoroughly. Pay special attention to the tax year that is involved. Get a copy of your return for that year and examine it to see if you can find the area of concern. As you read the notice, look for the timeframe in which you should respond. Generally, the IRS allows you 30 days to respond via letter or telephone.

If you had your taxes for that year done by a tax professional, contact him or her first to ask for clarification about the problem. If he or she is unable to help or if you don't have a regular tax professional, consult a qualified enrolled agent or a Certified Public Accountant and ask for a review of your return.

How to Resolve Your Tax Bill

Following an IRS audit, you may have a tax balance due to the IRS. If you owe an additional amount and you agree with the findings, you still don't need to panic. Even if you owe a sizable amount, the IRS will not require that you submit the entire amount at once. Contact the agency about setting up an installment plan that will allow you to send in a portion of the bill each month.

On the other hand, if the notice says you owe an additional amount but you disagree with the findings, write a detailed letter explaining your objections and mail it right away. Your tax professional should be able to help you compose your response.

Whatever you do, don't simply ignore an IRS audit notice and hope it will go away. The agency is usually willing to cooperate with taxpayers, as long as they communicate with representatives on a regular basis. If you respond to an IRS audit notice promptly, you'll be able to finish the audit process quickly.