A letter from the IRS can directly affect your wallet because it usually means the agency is questioning a tax return, asking for proof, or proposing changes that could lead to more tax, penalties, and interest. The earlier it is handled, the better the chances of limiting extra costs and avoiding a problem that grows from a simple document request into a collection case. Technically, an IRS audit notice is a written communication from the Internal Revenue Service telling a taxpayer that a return has been selected for examination and explaining what information, records, or response is required.

An audit notice may involve a correspondence audit by mail, an office audit, or a field audit. It often identifies the tax year under review, the items being questioned, and a deadline to respond. Missing that deadline can lead the IRS to adjust the return without the taxpayer's input, which can increase the amount claimed as due.

For a Missouri taxpayer, the practical effect can be serious even though the audit is federal. Federal changes can flow into a Missouri return and create state tax issues with the Missouri Department of Revenue as well. IRS timing rules also matter: the agency generally has three years to audit a return under Internal Revenue Code § 6501, though longer periods can apply in some situations. If an injury claim includes lost wages, self-employment income, or a settlement with tax consequences, an audit notice can complicate the paper trail and the value of the claim.