IRS Letter 566
Examination of Your Tax Return — Request for Information
The IRS is auditing specific items on your return and needs documentation.
Deadline
30 days from the notice date
Failure to respond results in automatic disallowance of the items under audit. The IRS will issue a proposed deficiency (CP2000 or Letter 3219) based on the audited items.
Respond promptly to protect your options and avoid escalation.
What IRS Letter 566 Means
Letter 566 initiates a correspondence audit — a focused, mail-based examination of specific items on your tax return. Unlike a field audit where an IRS agent visits you, a correspondence audit is conducted entirely through written exchanges. The IRS identifies specific deductions, credits, or income items that require documentation.
Common audit targets include charitable contributions without proper substantiation, home office deductions, business meal expenses, vehicle expenses, claimed losses from rental activities or businesses, education credits, and earned income credit. The IRS selects returns through their statistical DIF (Discriminant Information Function) scoring or because information on your return doesn't match third-party reports.
The 30-day deadline is real — if you don't respond with adequate documentation, the IRS automatically disallows the items under audit and issues a Notice of Deficiency (Letter 3219). Once that process begins, your options narrow and the timeline accelerates.
What the IRS Can Do If You Don't Respond
- Disallow specific deductions or credits if documentation is not provided
- Propose a deficiency based on the disallowed items
- Issue a Notice of Deficiency (Letter 3219) starting the 90-day Tax Court window
- Assess the deficiency and begin collection if the Tax Court deadline passes
- Expand the audit scope if your response raises new questions
What You Should Do Right Now
- 1
Read Letter 566 carefully — it will specify exactly which items are being examined
- 2
Gather all documentation supporting those items before the 30-day deadline
- 3
Organize your documents clearly — each document should be labeled to match the specific item it supports
- 4
Do not send original documents — send copies and keep originals
- 5
If you cannot respond in 30 days, request an extension in writing immediately
- 6
Work with a CPA to ensure your documentation is complete and persuasive
Resolution Options Available to You
Frequently Asked Questions About IRS Letter 566
What's the difference between Letter 566 and a full audit?
Letter 566 is a correspondence audit — it focuses only on specific items and is conducted by mail. A full field audit involves an IRS agent and typically covers the entire return. Correspondence audits are far more common and are generally easier to defend with proper documentation.
What kind of documentation does the IRS accept?
For charitable contributions: receipts, acknowledgment letters from the charity. For business expenses: receipts, credit card statements, business purpose documentation, mileage logs. For home office: measurements, receipts for office-specific expenses. For vehicles: mileage logs, repair records.
What if I don't have receipts?
You can substantiate expenses through bank statements, credit card records, and testimony — but the IRS prefers contemporaneous records. A tax professional can help you reconstruct documentation and argue for the closest allowable estimate under the Cohan rule.
Can the IRS expand the audit to other years after Letter 566?
Yes — if the audit reveals significant issues, the IRS can extend the examination to prior and subsequent years. This is more common in field audits, but a poorly handled correspondence audit can trigger a broader review.
Professional References
IRC: IRC §7602 — Examination of Books and Witnesses; IRC §6212 — Notice of Deficiency
IRM: IRM 4.10.2 — Examination of Returns — Correspondence Examination
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