IRS Letter 566 is the opening notice of a correspondence audit: the IRS is questioning specific items on your federal tax return and wants you to mail, fax, or upload documents proving those items are correct.1Taxpayer Advocate Service. Letter Notifying Taxpayer of Audit with Request for Additional Information The letter lists exactly what’s under review and sets a deadline. Miss it, and the IRS disallows the questioned items and sends you a bill for the difference.
Why You Got This Letter
Most Letter 566 audits target refundable credits and dependent-related claims, because those items directly change whether you get a refund or owe tax. The Earned Income Tax Credit is one of the most common triggers. The IRS wants proof that your qualifying child actually lived with you in the United States for more than half the year and that you meet the relationship and identification requirements.2Office of the Law Revision Counsel. 26 USC 32 – Earned Income The Child Tax Credit and Additional Child Tax Credit draw similar scrutiny around age and residency.
Head of Household filing status is another frequent target. You have to have paid more than half the cost of keeping up your home for a qualifying person, and the IRS cross-references your return against Social Security records. Mismatches often generate these letters automatically.
Letter 566 comes in several variants. Letter 566-S targets a specific line item; Letter 566-E focuses on wages, withholding, and refundable credits. The response process is essentially the same regardless of which version you received.1Taxpayer Advocate Service. Letter Notifying Taxpayer of Audit with Request for Additional Information
What Documents to Send
Your letter names the items under review, and what you send depends on those items. For EITC claims, the IRS typically encloses Form 886-H-EIC, which lists acceptable evidence of both residency and your relationship to the child.3Internal Revenue Service. Form 886-H-EIC – Supporting Documents to Prove Earned Income Credit For Child Tax Credit and Credit for Other Dependents claims, you may receive Form 14815 as a checklist.4Internal Revenue Service. Form 14815 – Supporting Documents to Prove the Child Tax Credit and Credit for Other Dependents For dependency claims more broadly, Form 886-H-DEP outlines what the IRS accepts.5Internal Revenue Service. Form 886-H-DEP – Supporting Documents for Dependents
Residency evidence needs to show the child’s name at your address for the required period. The IRS accepts school records on official letterhead, medical records from doctors or clinics, childcare provider statements, court documents, and dated letters from landlords, social service agencies, or places of worship. Each document must show both the child’s name and your address, and cover the specific tax year under audit. If a document shows the child’s name and your address but not your name, you’ll need a second document linking your name to that address.3Internal Revenue Service. Form 886-H-EIC – Supporting Documents to Prove Earned Income Credit
Relationship evidence depends on the connection between you and the child. If the child is your biological son or daughter and your name appears on the birth certificate, you generally don’t need to send anything extra for the relationship piece. For grandchildren, nieces, nephews, stepchildren, or foster children, you’ll need birth certificates, court orders, or other legal documents that trace the family connection. Adopted children require adoption records or a letter from the placement agency.3Internal Revenue Service. Form 886-H-EIC – Supporting Documents to Prove Earned Income Credit
Send copies, not originals. The IRS warns that originals may not be returned.
Fill out every applicable section of the questionnaire the IRS included. Note the specific months the child lived with you, and match names and identification numbers exactly as they appear on your government-issued documents. A blank section signals to the examiner that you don’t have the evidence, even when you just forgot to fill it in.
How to Submit Your Response
You have three ways to get the package to the IRS. Certified mail with return receipt, sent to the address printed on your letter, creates a paper trail proving you responded on time. You can fax to the number on the letter. Or you can use the IRS Document Upload Tool to send scans, photos, or PDFs through a secure portal and get confirmation of receipt.6Internal Revenue Service. IRS Document Upload Tool The upload tool may require an access code from your notice to link the documents to your case. Whichever method you use, keep copies of everything.
If You Need More Time
If you can’t gather your documents before the deadline, ask for an extension. For mail audits, the IRS will ordinarily grant a one-time automatic 30-day extension. Fax a written request to the number on your letter, or mail it to the address on the letter if you can’t fax. The IRS will contact you if it can’t grant the request.
One limit matters: if your case has already escalated to a Notice of Deficiency sent by certified mail, the IRS cannot grant additional time. At that point the deadline is statutory, and only the Tax Court can intervene.7Internal Revenue Service. IRS Audits
You also don’t have to handle the audit yourself. An enrolled agent, CPA, or attorney can respond on your behalf if you file Form 2848, Power of Attorney and Declaration of Representative.8Internal Revenue Service. Instructions for Form 2848, Power of Attorney and Declaration of Representative Professional representation typically runs $150 to $450 per hour depending on location and complexity.
After the IRS Reviews Your Documents
An examiner reviews your evidence against the items in question. If your documents satisfy the inquiry, the IRS closes the audit with no changes and sends a closing letter.9Internal Revenue Service. IRM 4.10.11 Claims for Refund, Requests for Abatement, and Audit Reconsiderations Any refund that was held gets released.
If the examiner is only partially convinced, the IRS may allow some items and disallow others. If the examiner isn’t satisfied at all, you’ll get a report proposing changes and a 30-day letter giving you the chance to agree or dispute the findings before anything becomes final.
If You Disagree With the Outcome
The 30-day letter, typically Letter 525 in correspondence audits, gives you 30 days to request a conference with the IRS Independent Office of Appeals. You can also request an informal conference with the examiner’s manager before that deadline passes. Make the Appeals request in writing and include your reasons for disagreeing.10Taxpayer Advocate Service. Letter 525 Audit Report/Letter Giving Taxpayer 30 Days to Respond
If you don’t request Appeals within that window, or Appeals can’t resolve the dispute, the IRS issues a Notice of Deficiency (the “90-day letter”) by certified mail.11Office of the Law Revision Counsel. 26 USC 6212 – Notice of Deficiency This is your last chance to challenge the IRS before it assesses the tax. You have 90 days from the mailing date (150 days if you’re outside the United States) to file a petition with the U.S. Tax Court.12Office of the Law Revision Counsel. 26 USC 6213 – Restrictions Applicable to Deficiencies; Petition to Tax Court Miss that window and the IRS assesses the tax; your remaining options narrow considerably.
What It Costs If the IRS Wins
When an audit results in additional tax, you’ll owe more than the tax itself. Interest accrues from the original due date of your return, not from the date the audit concludes, until the balance is paid in full.13Office of the Law Revision Counsel. 26 USC 6601 – Interest on Underpayment, Nonpayment, or Extensions of Time for Payment of Tax For the first quarter of 2026, the individual underpayment rate is 7% per year, compounded daily.14Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026 On a two-year-old audit adjustment, that interest alone adds meaningfully to your bill.
The IRS may also impose an accuracy-related penalty of 20% of the underpayment if it finds you were negligent or substantially understated your tax.15Office of the Law Revision Counsel. 26 USC 6662 – Imposition of Accuracy-Related Penalty on Underpayments You can avoid this penalty by showing reasonable cause and good faith, meaning you had a legitimate basis for your position.16Office of the Law Revision Counsel. 26 USC 6664 – Definitions and Special Rules Keeping records of why you believed you qualified for a credit strengthens that argument.
Credit Bans for Reckless or Fraudulent Claims
The consequences go beyond money if the IRS concludes you claimed credits you knew you didn’t qualify for. A finding of reckless or intentional disregard of the rules triggers a two-year ban on claiming the EITC, Child Tax Credit, Additional Child Tax Credit, Credit for Other Dependents, and American Opportunity Tax Credit. A finding of fraud extends the ban to ten years.17Internal Revenue Service. What to Do if We Deny Your Claim for a Credit During the ban, the IRS will reject any e-filed return that tries to claim those credits.
If You Already Missed the Deadline
If you didn’t respond in time and the IRS assessed additional tax based on the proposed changes, you still have a path forward through audit reconsideration. This isn’t a formal appeal. It’s a request for the IRS to reopen and reexamine your case based on documentation you weren’t able to provide the first time. Send a written request to the IRS office that last contacted you, along with copies of the supporting documents for the tax year in question. The documentation must be information that wasn’t part of the original audit. You should hear back within about 30 days.18Taxpayer Advocate Service. Audit Reconsiderations
If you have an installment agreement in place for the assessed balance, keep making those payments during reconsideration. The IRS doesn’t pause collection while it takes a second look.