Understanding Tax Audits in 2026
Correspondence exams, office audits, and field exams — what the IRS is looking at now and how to respond.
Most “audits” Americans face in 2026 are not a revenue agent at the dining table. They are correspondence exams generated by document matching (1099-K, 1099-NEC, Form 1098-T) and by issue codes the IRS has staffed up: Schedule C losses, fuel tax credit, research credit, and employee retention credit claims that never should have been filed.
Three exam types
- Correspondence: a letter asking for records. Deadlines are real. Mail (or the IRS document-upload tool) is the forum. If you ignore it, the IRS will disallow the deduction and assess.
- Office audit: you or your representative appear at an IRS office with a defined list of issues.
- Field audit: the agent comes to the business. These are broader. Do not give a tour. Do not leave the agent alone with your bookkeeper.
What has changed in practice
Information reporting is denser. Third-party payment apps, brokerage 1099-B, and crypto Forms 1099-DA mean “I didn’t get a form” is a weaker defense. Automated underreporter (AUR) CP2000 notices are not audits in the technical sense, but they assess tax if you do not answer.
ERC and certain COVID-era credits are still in exam and recapture. If you filed those credits through a promoter, expect a letter. Do not send a full set of bank statements until someone has scoped what the agent actually asked for.
How to handle the first 30 days
- Calendar the response date and request a hold if you need a representative.
- File Form 2848. The IRS will not speak to us without it.
- Answer the issues raised — not your life story, not extra years.
- If the agent expands the exam, ask why, in writing.
- Unagreed cases go to Fast Track, Appeals, or a 90-day statutory notice. Missing the petition deadline is how audits become collections.
Representation is not optional on a field exam
Taxpayers talk themselves into accuracy penalties. A good representative’s job is to produce organized records, concede what is wrong, and hold the line on what is right. That is slower than “just explaining it,” and it is how you avoid a second-year pickup.
General information for tax year 2026, not legal or tax advice. IRS programs depend on your filing history, assets, and collection statute. Talk with a representative before you send the IRS money or financials.