IRS Audit Response Pack: Sample Cover Letter, Indexing, and Exhibits

An audit letter arrives and the clock starts. What slows teams is not the facts. It is scattered documents, unclear explanations, and long responses that miss the point. This pack shows a clean structure you can copy, so you can answer once, answer clearly, and move on.

What this section covers

A practical response structure for US IRS audits that also maps well to UK HMRC enquiries. You get a concise cover letter model, an exhibit indexing system, reconciliation schedules, and a fact timeline template. It suits in-house teams and companies working with offshore accountants. Use it as your IRS Audit Response Pack: Sample Cover Letter, Indexing, and Exhibits (Download).

Before you draft: gather and label

• IRS notice, IDR, or exam letter with requested items
• Tax return and workpapers for the year under exam
• Trial balance, GL extracts, and source documents for each issue
• Signed engagement letters and any prior correspondence
• Authorized representative details and Power of Attorney (if used)

Set a single folder root:
/Audit/IRS/<TaxYear>/Response_YYYYMMDD/
Create subfolders: 01_Cover_Letter, 02_Exhibits, 03_Recons, 04_Timeline, 05_Support.

Cover letter: structure and sample

Purpose

Frame the response, map each request to exhibits, and state the outcome you seek. Keep to one or two pages.

Components

1. Letterhead with EIN, tax year, notice number, and contact details
2. Salutation and reference line
3. One-paragraph context and scope of response
4. Issue-by-issue answers with exhibit callouts
5. Summary and requested disposition
6. Signature block and contact info

Sample (copy and edit)

[Date]

Internal Revenue Service
[Address from notice]
Re: [Taxpayer Legal Name], EIN [XX-XXXXXXX] — Tax Year [YYYY]
    Response to [Notice/IDR reference and date]

Dear Examiner,

We submit our response to the Service’s information request dated [date] for the items listed below. Each item is addressed briefly here and supported by indexed exhibits.

Issue A: [Short title]
- Response: [One to three sentences with the conclusion]
- Support: Exhibits A1–A3; Reconciliation R-A; Timeline T1

Issue B: [Short title]
- Response: [One to three sentences with the conclusion]
- Support: Exhibits B1–B2; Reconciliation R-B

We believe the enclosed materials resolve the requests as filed. Please contact [Name, Title, phone, email] for any clarifications.

Sincerely,
[Name]
[Title], on behalf of [Taxpayer Legal Name]
[Address | Phone | Email]


For UK enquiries, replace IRS references with HMRC, add UTR and VAT number as relevant.

Exhibit indexing that examiners can follow

Rules

• Use short, legible names.
• One fact per exhibit where possible.
• Cross-reference in the letter and in the file name.
• Add page numbers to multi-page PDFs.

Format

Prefix by issue → Letter (A, B, C)
Sequence → 1, 2, 3
Example filenames:
A1_Invoice_AlphaCo_2024-03-17.pdf
A2_BankStatement_Chase_Apr2024_p1-4.pdf
B1_Contract_SaaS_2023-12-01.pdf


Exhibit index sample

| Ref | Description                              | Period      | Source          |
|-----|------------------------------------------|-------------|-----------------|
| A1  | Customer invoice #INV-311 (Alpha Co.)    | Mar 2024    | AR Subledger    |
| A2  | Bank statement (Chase) p.1–4             | Apr 2024    | Bank Portal     |
| A3  | Cash receipt screenshot (ID #8472)       | Apr 2024    | ERP             |
| R-A | Revenue tie-out: GL→Return (Sch. M-1)    | FY 2024     | Close workbook  |
| T1  | Factual timeline for Issue A             | 2023–2024   | Prepared by Co. |


Save the index as 02_Exhibits/Exhibit_Index.xlsx and export a PDF copy in the same folder.

Reconciliations that close the loop

Use targeted schedules to connect source data to the filed return. Avoid long narratives.

Revenue tie-out (example layout)

| Line | Source (GL) | Amount | Adjustments | Return Line | Amount |
|------|-------------|--------|-------------|-------------|--------|
| 1    | GL 4000     | 1,245,220 | - Deferred Rev Δ (35,410) | Form 1120 Line 1a | 1,209,810 |
| 2    | GL 4010     |   58,600 | - Contra Rev (1,200)      | Form 1120 Line 1a |   57,400 |
|      |             |        |             | Total per return | 1,267,210 |


Expense sampling tie-out

| Sample ID | Vendor | Date | Amount | GL Acct | Exhibit Ref | Notes |
|-----------|--------|------|--------|---------|-------------|-------|
| S-01      | Beta Ltd | 02/14 | 4,820 | 6100    | A1          | Contract on file |


Keep each recon to one tab, with a clear sign-off block.

Timeline of facts

Summarize what happened, when, and who approved it. This helps resolve “why” without long emails.

Template

| Date       | Event / Document          | Parties         | Impact on Tax Position | Exhibit |
|------------|---------------------------|-----------------|------------------------|---------|
| 2024-01-05 | MSA executed              | Taxpayer, Alpha | Revenue recognition start | B1   |
| 2024-03-17 | First invoice issued      | Taxpayer        | Performance obligation met | A1 |
| 2024-04-10 | Cash received             | Bank            | Cash application        | A2, A3 |


Packaging and submission

• Combine the cover letter and exhibit index into a single front packet PDF.
• Place each issue in its own subfolder with matching filenames.
• Use searchable PDFs. Avoid images of text when possible.
• Keep proof of mailing or portal upload receipts.
• Track deadlines and call logs in a response tracker.

For HMRC, follow the enquiry letter’s channel. Use the same indexing logic and keep a file note for any phone calls.

Maker–checker with offshore teams

• Assign owners for each issue.
• Require a preparer sign-off and a reviewer sign-off on every recon and timeline.
• Use a checklist to confirm every exhibit is referenced at least once.
• Restrict edit rights on the final PDF packet. Keep source files versioned.

Quality checks before you send

• Does every issue in the notice map to a response paragraph
• Does every claim have at least one exhibit
• Do totals in recons match the return and GL
• Are dates consistent across invoices, bank, and ledger
• Is contact information correct and visible on page one

Copy-paste templates

1) Cover letter shell

[Company Letterhead]
[Date]
IRS — [Unit/Address from notice]
Re: [Taxpayer], EIN [XX-XXXXXXX], Tax Year [YYYY]
Response to [Notice/IDR #] dated [Date]

[Opening paragraph: scope and summary]

Issue A — [Title]
Response: [2–3 sentences]
Support: Exhibits A1–A?, Reconciliation R-A, Timeline T1

Issue B — [Title]
Response: [2–3 sentences]
Support: Exhibits B1–B?, Reconciliation R-B

Requested disposition: [Close as filed / adjust as described]

Sincerely,
[Name, Title]
[Phone, Email]


2) Exhibit index (CSV starter)

Ref,Description,Period,Source,File
A1,Customer invoice #INV-311,Mar 2024,AR Subledger,A1_Invoice_AlphaCo_2024-03-17.pdf
A2,Bank statement p1-4,Apr 2024,Bank Portal,A2_Bank_Chase_Apr2024_p1-4.pdf
R-A,Revenue tie-out FY2024,FY2024,Close Workbook,RA_Revenue_TieOut_FY2024.xlsx


3) Reconciliation sign-off block

Prepared by: [Name, Date]   Reviewed by: [Name, Date]   Tickmarks: [Legend]


4) Timeline header

Matter: [Issue name]   Period: [YYYY]   Contact: [Name, Email]


Summary

Keep the response short at the front and heavy in the back. A clear cover letter, a tight index, reconciliations that tie to the return, and a dated timeline will answer most audit questions without back-and-forth. This structure helps US IRS and UK HMRC workflows and scales well with offshore support.

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