You just got a letter that says the IRS is reviewing a tax return and wants more information, documents, or an explanation of certain items. An IRS audit notice is a formal written notice from the Internal Revenue Service telling a taxpayer that a filed return has been selected for examination. The notice usually identifies the tax year involved, the issues under review, what records are needed, and how the audit will be handled - by mail, at an IRS office, or in a field examination. It is not the same as a bill, but it can lead to added tax, penalties, and interest if the IRS decides the return was incorrect.

Practically, the notice starts a deadline-driven process. Missing the response date or sending incomplete records can make the audit harder to resolve and may cause the IRS to assess tax based on the information it has. A taxpayer may need bank records, receipts, mileage logs, business books, or proof for deductions and credits. Depending on the outcome, the taxpayer may have appeal rights, may face a proposed tax deficiency, or may need a payment plan.

For an injury claim, an audit notice can matter if a settlement includes taxable portions, such as interest or certain wage-related payments, or if medical deductions were previously claimed. In Utah, there is no separate Utah-specific version of an IRS audit notice; it is governed by federal tax procedure, though a federal audit can also lead to review by the Utah State Tax Commission.