Your return has been selected for examination

What the letter means

A return has been selected for examination and a revenue agent wants to arrange contact. Selection happens for a range of reasons — statistical scoring, a mismatch with a third-party report, a related examination of a partnership or another taxpayer, or occasionally random selection. The letter will not tell you which.

Being selected is not an accusation. Most examinations end with either no change or a modest adjustment. What separates a straightforward audit from a punishing one is rarely the underlying facts. It is how much ground the examination ends up covering.

Why scope decides everything

An examination that begins with one issue on one year can grow to several issues across several years. Agents are permitted to expand where what they find suggests it is warranted, and the material that most often prompts expansion is material the taxpayer supplied without being asked.

Narrowing an examination after it has widened is considerably harder than keeping it narrow. This is the single strongest argument for having representation from the outset rather than after the first meeting has gone badly.

The first conversation

• You do not have to meet the agent yourself. A representative can appear on your behalf under a power of attorney, and in most examinations the taxpayer never speaks to the agent at all
• Think carefully about location. A field examination conducted at your home or business exposes more than one conducted at a representative’s office
• Establish what is being examined — which years, which line items — and get it in writing where possible
• Do not guess. An inaccurate answer given confidently is worse than saying you will check and respond
• Reconstruct records before the meeting, not during it. Missing documentation handled early is a substantiation exercise. Handled late it looks like something else

If you are asked to sign an extension

The IRS generally has three years from filing to assess additional tax. When an examination is still open as that period approaches, the agent will often ask you to sign a consent extending it.

Refusing is not free — the usual consequence is that the agent issues a Notice of Deficiency based on what is in the file, which starts a 90-day clock. Signing is not free either, because it gives the examination more time to develop.

It can also sometimes be negotiated: limited to specific issues, or to a shorter period than proposed. This is a genuine strategic decision, and it is worth taking advice before signing rather than after.

When an audit is more than an audit

Most examinations are entirely civil. A few are not, and the signs are worth knowing:

• Contact from IRS Criminal Investigation rather than a revenue agent
• Two agents appearing together, one of whom mainly takes notes
• Questions that focus on what you knew, when you knew it, and who prepared what
• An agent who becomes noticeably less communicative and then goes quiet
• Your own knowledge that something on the return will not withstand examination

If any of that applies, the right move is to stop and take advice before the next contact. What you say to an agent is not privileged, and it cannot be unsaid. Once matters may turn criminal, your accountant cannot reliably protect those conversations either — they can be compelled to repeat them.

What to do now

Note the years listed on the letter and gather the return and supporting records for those years only. Do not send anything before you know what is being asked and why. If the letter names a revenue agent and a date, that date is a scheduling request rather than a legal deadline — it can be moved, and moving it to prepare properly is normal.

This page is general information about federal tax procedure. It is not legal advice and does not account for the facts of your matter. Reviewed August 2026.