How to Respond to IRS Audit Notice 566 or 525 (Oklahoma Guide)

You just received a letter from the IRS marked Notice 566 or Notice 525. Now what?

Don’t panic — but don’t ignore it either.

These notices are the IRS’s way of saying: We’ve selected your return for examination.



At Boulanger CPA, we help Oklahoma taxpayers navigate IRS audits professionally and discreetly. Here’s what these notices mean and what steps to take if you receive one.

What Is IRS Notice 566?

IRS Notice 566 is the IRS’s official notice of an initial audit. It usually means:



• The IRS is reviewing your return more closely
  
  
• You may be required to send documentation
  
  
• The IRS may be considering a formal audit (correspondence or in-person)
  
  

This is typically a pre-audit letter to gather more information before determining next steps.

What Is IRS Notice 525?

Notice 525 usually comes after the IRS has reviewed your information. It typically includes:



• Proposed changes to your tax return
  
  
• Adjustments to income, deductions, or credits
  
  
• An explanation of why the IRS is making these changes
  
  

This is your opportunity to agree or appeal the proposed changes.

Are You Being Audited?

Yes — or about to be.



These notices are strong indicators that your return has been flagged. The process may escalate to a full audit if not handled properly.

Common audit triggers include:

• Large charitable deductions
  
  
• High Schedule C income with low expenses
  
  
• Rental property losses
  
  
• Mismatches with 1099s or W-2s
  
  
• Business use of vehicle without logs
  
  
• Foreign accounts or crypto transactions
  

How to Respond to Notice 566 or 525

 Step 1: Do not call the IRS directly if you’re unsure what to say

Step 2: Contact a licensed tax professional

Step 3: Gather all requested documentation

Step 4: Let your CPA or tax rep correspond on your behalf



We handle all correspondence, documentation, and negotiation directly with the IRS.

What Happens If You Ignore It?

Ignoring either notice can lead to:

• Automatic disallowance of deductions or credits
  
  
• New tax balances with interest and penalties
  
  
• Referral to IRS collections
  
  
• Potential audit expansion to additional years
  
  

Responding properly and on time is critical.

Real Example: Audit Help in Oklahoma City

Client: Construction contractor in OKC



• Received Notice 566 about business mileage
  
  
• We responded with logs, receipts, and an affidavit
  
  
• IRS accepted explanation — no changes made

Don’t Face the IRS Alone

At Boulanger CPA, we:

• Represent Oklahoma clients in audits from start to finish
  
  
• Handle IRS communication, document prep, and appeals
  
  
• Fight for fair outcomes and prevent unnecessary assessments
  
  

📞 Call (405) 384-4900
📅 Schedule your confidential audit strategy call

✍️ About the Author

Marc Boulanger, CPA, is the founder of Boulanger CPA and Consulting PC, a CPA firm based in Oklahoma City, OK.

Marc is the author of Oklahoma Taxpayers' Guide: Taking a Stand Against the IRS and has resolved hundreds of complex federal and state tax cases.

With over a decade of experience in IRS and OTC representation, Marc helps Oklahomans navigate high-stakes tax problems with clear strategy and calm expertise.

He is a Certified Tax Representation Consultant and a member of the American Society of Tax Problem Solvers (ASTPS).

📍 Office: Oklahoma City, OK | 📞 (405) 384-4900 | 🌐 www.oklahomacity.cpa