What is a correspondence audit and how do I respond?

A correspondence audit is the most common type of IRS audit, conducted entirely through the mail. The IRS sends you a letter (usually CP2000, CP2501, or similar) identifying specific items on your return that they're questioning. Common items include: unreported income from 1099s, questionable deductions, filing status verification, dependency claims, and education credits. To respond effectively: (1) Read the notice carefully and identify exactly what's being questioned, (2) Note the response deadline (usually 30 days), (3) Gather documentation that supports your position, (4) Write a clear, concise response letter referencing the notice number and tax year, (5) Organize your supporting documents logically, (6) Make copies of everything before mailing, (7) Send via certified mail with return receipt, (8) If you agree with the changes, sign and return the form with payment if applicable. If you disagree, you can partially agree (accept some adjustments, dispute others) or fully disagree with documentation. If the IRS doesn't accept your response, you can request an appeal. Most correspondence audits are resolved within 2-3 exchanges of letters.