Letter 566

A Letter 566 opens a mail audit: the IRS has selected the return for examination and the letter identifies exactly which items are under review, what documentation to send, where to send it, and whom to contact. The Taxpayer Advocate's own guidance leads with the essential fact: selection doesn't automatically mean something is wrong.

“These specific items on your return are being examined. Send copies — never originals — of the listed documentation by the due date. After review, we'll accept the return as filed, ask for more, or propose changes, and you'll have full rights to disagree at every later step.”

Responding well here can end the audit at its first step — the IRS accepts many examined returns as filed once documentation arrives. Ignoring it runs the other way: unanswered exam letters mature into proposed disallowances and, eventually, a 90-day notice of deficiency.

• The letter, which names the exact items under review — nothing else needs proving
• Receipts, statements, and records for those items only
• Copies of everything, originals kept at home
• Your name and identifying details on each faxed page, per the IRS's own instruction

• Scoping the response to what's asked — over-sending can widen an audit
• Assembling documentation that answers the examiner's tests directly
• Communicating with the examiner so deadlines flex when needed
• Positioning the case for Appeals from the start, in case it goes there