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A tax audit, whether from the IRS or the Minnesota Department of Revenue, is not a conversation. It is a formal legal proceeding with statutory deadlines, evidentiary rules, and a burden of proof that sits squarely on you, the taxpayer.
The best thing you can do when you receive an audit notice is retain qualified representation. An enrolled agent or tax attorney who handles audits regularly knows how the process works, what the auditor is looking for, and how to build a record that protects your position through every stage, including administrative appeals and Tax Court if it comes to that.
That said, not everyone chooses that path. Some taxpayers decide to handle it themselves, whether for cost reasons or because they are confident the numbers are on their side.
We have watched this play out. Self-represented taxpayers who are certain they are right often find that being right and being able to prove it in the format the government requires are two different things. The mistakes below show up consistently, across IRS and state audits alike. Each one tends to make things worse.
1. Assume Your Documents Will Speak for Themselves
The most common mistake self-represented taxpayers make is believing that handing over a stack of records ends the conversation in their favor.
It does not. An auditor reviews every document you provide against every other document you provide, and against your bank statements and filed returns. Inconsistencies between your records and your reported figures are not resolved in your favor by default. They become the basis for the assessment.
Before you submit anything to an auditor, know what your documents actually show. Not what you believe they show. What a skeptical reviewer will conclude when they compare them line by line to your deposits and reported income.
Documents that contradict your return are not neutral. They are evidence against you.
2. Conflate “I Didn’t Owe” with “I Can Prove I Didn’t Owe”
This distinction costs taxpayers real money every year.
A government tax assessment, whether from the IRS or MN DOR, carries a presumption of correctness. The auditor does not have to prove you owe the tax. You have to produce substantial evidence that the assessment is wrong.
Saying you did not make money, or that you did not owe anything, is not evidence. It is an assertion. To overcome an assessment, you need documentation that establishes your actual income and deductions in a form the agency can evaluate. That means records that tie to your bank statements, invoices that match your reported figures, and an accounting that holds up when compared against what you actually deposited and spent.
A verbal explanation does not displace a reconstructed income calculation built from your own bank records. Documentation does.
3. Ignore or Refuse Discovery Requests
If your audit results in a formal assessment and you appeal it, you are in a legal proceeding. Discovery is part of that process, whether you are in IRS Appeals, the U.S. Tax Court, or the Minnesota Tax Court.
Self-represented taxpayers sometimes treat discovery requests as optional or adversarial. They respond minimally, or not at all, on the theory that they have already provided everything relevant.
That approach forfeits your ability to build a record. Discovery is the mechanism by which you introduce the evidence you want the court to consider. If you do not respond substantively, the only record before the court is the one the government built. And the court cannot rule in your favor on a question you never provided evidence to answer.
Refusing discovery does not strengthen your position. It eliminates it.
4. Wait for the Audit to Escalate Before Getting Help
Many taxpayers who start an audit without representation eventually realize they are in over their heads, but by then some of the most important windows have already closed.
The audit phase is when the record gets built. It is when you can present explanations, provide supporting documentation, and influence what the auditor includes in their report. Once the audit closes and a formal assessment issues, you are in an appeals or litigation posture, working with the record that was built without a strategy behind it.
Getting representation after an assessment issues is still valuable. But it is harder and more expensive than getting it before the audit closes, because you are now working to undo a record rather than build one correctly from the start.
If you realize mid-audit that the process is more complicated than you expected, that is the time to call.
5. Calculate the Cost of Representation Against the Wrong Number
The fee for professional audit representation is real money. We understand why taxpayers weigh it carefully.
The mistake is comparing that fee against what you think you will owe, based on your view of the facts. The more relevant comparison is between the fee and the cost of a fully adverse outcome, because auditors and courts do not see the facts the way you do.
Time and again we have seen taxpayers in MN DOR audits and IRS examinations decline representation, handle the matter themselves, and end up with assessments that substantially exceeded what professional representation would have cost. The audit fee is not a guarantee of outcome. But it buys you someone who knows the process, knows the record requirements, and knows how to present your position in the format the government actually evaluates.
If you are weighing whether to hire someone, run the math on the full adverse scenario, not just the one you expect.
If You Have Received an Audit Notice
The audit process runs on the government’s timeline. Deadlines for responding to information requests, filing administrative appeals, and answering discovery are statutory. Missing them has consequences that are difficult or impossible to undo.
Our firm represents taxpayers in IRS examinations, MN DOR audits, and appeals at every stage. If you have received an audit notice or a tax order you believe is incorrect, contact us before you respond.
Matthew Wildes, JD, CPA | CLAW Tax Group
Schedule a consultation or call (651) 323-2255.
The content of this article is for informational purposes only and does not constitute legal or tax advice. Consult a qualified tax professional for guidance specific to your situation.
