Have You Received a Due Diligence Audit Letter? Don’t Panic. We’re Here to Help.
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As a tax professional, the news of receiving an IRS due diligence audit letter can feel like an overwhelming challenge, especially if you’ve never faced one before. The IRS’s due diligence requirements are complex, and navigating the audit process on your own can seem daunting. But you don’t have to do this alone.
At iTax Institute, we specialize in helping tax preparers and professionals like you who are facing due diligence audits from the IRS. Our team has years of hands-on experience in the tax industry, and we understand the IRS’s audit process inside and out. We’re here to guide you through every step and ensure you get the support you need to succeed.
Why Choose Us?
We’ve Got the Expertise to Guide You Through the Process
Our team is built on years of experience working as tax professionals ourselves. We understand the challenges that come with preparing accurate and compliant tax returns. Our knowledge of the tax code, including IRS due diligence regulations, means we can provide clear, expert guidance to help you through the audit process.
IRS due diligence requirements are intricate and constantly evolving. We stay up to date on all the latest IRS regulations, so you don’t have to. We’ll make sure that you meet all of the necessary documentation and verification requirements. Whether it’s understanding Form 8867 or knowing how to handle various tax credits, we know exactly what the IRS expects.
If you’ve received a due diligence audit letter, our team will work closely with you to review your files, ensure your records are complete, and help you prepare your response to the IRS. We offer hands-on assistance throughout the audit process, so you can focus on your business while we manage the details.
You don’t have to wait for an audit letter to make sure you’re in compliance. Our preventative services are designed to ensure that your processes are always in line with IRS requirements. From reviewing your documentation practices to training your staff on due diligence best practices, we provide proactive strategies that protect your business long before an audit arises.
Over the years, we’ve worked with numerous tax preparers who’ve faced similar audits. Our experience in this area allows us to offer tailored solutions based on your unique situation. We’ll help you avoid common mistakes and show you how to strengthen your practices, ensuring that your returns are always compliant.
Being audited by the IRS can feel isolating. But rest assured, you’re not alone. Our team is here to support you every step of the way. Whether you're preparing for a potential audit or you’re currently in the middle of one, we are your trusted partner in getting through it successfully.
At iTax Institute, we provide comprehensive services to tax professionals facing IRS due diligence audits. Here’s how we can help:
Get ahead before the IRS ever contacts you.
This is a preventative review to help you avoid audits in the first place.
We assess your current practices and documentation.
Includes a mock audit of your files to find weak spots.
Helps you understand your audit risk and what to improve.
Who is this for?
Tax professionals who have not received an audit letter.
Anyone wanting to proactively tighten up their due diligence compliance.
Business owners who want peace of mind before audit season.
Delivery: In-person, one-on-one at your office or chosen location
Travel Fees: Additional and based on location
Availability: Limited bookings per month to ensure personalized service and attention to detail
On-Site Compliance File Audit
Get your client files professionally reviewed, with the same eye an examiner would use.
An expert audits up to 25 client files in person for tax credit compliance.
You'll get file-specific feedback on what's complete, missing, or needs work.
Receive a written summary with clear action steps to improve documentation.
Get three follow-up Zoom calls for continued review and support.
Who is this for?
Tax preparers seeking a proactive review of their due diligence files.
Tax preparers wanting expert feedback to improve documentation.
Tax preparers needing third-party review to meet compliance standards.
Build a stronger foundation for your business
This service helps you create and maintain a robust internal compliance system.
Includes custom coaching or training for your team.
We help you build or upgrade your compliance processes.
Focused on long-term sustainability and IRS readiness.
Who is this for?
Tax businesses looking to expand or level up their operations.
Anyone building an in-house compliance team.
Pros who want hands-on help keeping their business audit-ready.
Need help writing your appeal? We’ve got your back.
We'll help you draft a professional, well-structured appeal that gives you a fighting chance.
Support includes strategy and written documentation.
We collaborate with experts when needed to strengthen your case.
Who is this for?
Tax pros who disagree with the outcome of their audit.
Anyone preparing to enter the IRS appeals process.
Clients who need expert help crafting a persuasive appeal.
Want To Go Even Deeper With Due Diligence?
Whether you’re working with us 1-on-1 or managing your own team, you need airtight systems that work even when you’re not watching.
Meet Your New Compliance Secret Weapon
The Due Diligence Domination Bundle
Protect Your Business. Prove Every Return. Dominate Compliance.
The Due Diligence Domination Bundle is your all-in-one compliance defense system, designed specifically for tax professionals who want to protect their practice, maximize client trust, and stay audit-ready at all times.
What's Included:
Editable client intake forms, interview logs, due diligence checklists & signed declarations
Audit documentation trackers to store and prove what you know
Red flag return assessment tools to spot risky refunds before they hit your software
SOPs (standard operating procedures) to keep your team aligned and audit-proof
Video tutorials showing exactly how to brand, customize, and apply every template in real-life scenarios
Valued at $2,497, because that’s exactly what you could be fined for one non-compliant return.
Instead of paying the IRS, invest in protection.
Pay in 4 installments or over 3–12 months
FAQs
What is IRS Due Diligence and why is it so important for tax professionals?
IRS due diligence refers to specific requirements tax professionals must meet when preparing returns that claim the Earned Income Credit (EIC), Child Tax Credit (CTC), American Opportunity Tax Credit (AOTC), or Head of Household (HOH) status.
You are legally obligated under IRC §6695(g) and Treasury Reg. §1.6695-2 to properly interview, document, and evaluate eligibility for these credits. Failing to meet these obligations can result in substantial penalties — even if the tax return is accurate.
What are the penalties for noncompliance with IRS due diligence?
The IRS may audit up to 25 files, and for each file, you can be assessed up to 4 separate $635 penalties, totaling up to $2,540 per file. That’s a maximum exposure of $63,500 for one audit.
Here are the 4 key due diligence penalties:
- Knowledge Standard Violation (you knew or should have known the claim was incorrect)
- Failure to Complete Form 8867
- Failure to Keep Proper Records
- Failure to Ask Adequate Questions/Document Responses
Refer to IRC §6695(g) and IRS Pub 4687 for more.
What happens if I fail to meet due diligence requirements set forth by the IRS?
Failing to meet IRS due diligence requirements can lead to serious consequences, including:
- Suspension or expulsion from the IRS e-file program
- Disciplinary action by the IRS Office of Professional Responsibility (OPR)
- Injunctions barring you from preparing tax returns for others
- Criminal penalties for filing fraudulent returns
Compliance is critical to maintain your professional standing and avoid these risks.
What should I do if I get selected for a due diligence audit?
Contact us immediately. We’ll guide you from start to finish.
Our team will:
- Perform a Due Diligence File & Notes Review for up to 25 files
- Review your client interviews, documentation, forms, and procedures
- Help you prepare your audit responses
📅 Schedule your free consultation to learn more about how we can help you avoid or survive an IRS due diligence audit.
Who are these services for?
These services are ideal for:
- Tax professionals preparing EIC, CTC, HOH, or AOTC returns
- New preparers who want to avoid costly mistakes
- Experienced preparers facing an IRS audit or notice
- Service bureau owners training large teams
- Anyone seeking to avoid up to $60,000 in due diligence penalties
Do you offer group training for my staff or service bureau?
Yes. We offer customized group training that aligns with your brand and firm structure. These can be virtual or in-person.
✅ Special pricing is available.
📅 Schedule your free consultation to build a custom training package for your team.
Can I book a one-on-one audit or review of my current due diligence procedures?
Yes. We offer personalized Due Diligence File Audits, covering up to 25 client files. You’ll receive:
* Feedback on documentation
* Notes review
* Risk assessment and audit readiness tips
I have a large number of clients — can you help me set up my own compliance or due diligence department?
Absolutely. We can help you establish an internal compliance process to ensure your team consistently meets IRS due diligence requirements.
This includes:
- Staff training
- File documentation systems
- Due diligence workflow implementation
📅 Book a free consultation for a tailored compliance solution.
What are the due diligence templates and how can they help my practice?
Our Due Diligence Templates & Tools Package includes:
- Interview question bank
- Due diligence checklists
- Notes & audit-ready documentation templates
- Organizational chart for team compliance
- Samples of successful past audit notes
- These tools are essential for systematizing your compliance process.
How often do you offer free masterclasses?
FREE MASTERCLASS LIVE EVERY THURSDAY AT 12:00 PM CST
Discover how to protect your tax practice from expensive audits, penalties, and sleepless nights. Get real strategies from real experts that’ll keep you compliant and profitable. IT'S FREE. IT'S LIVE. IT'S EXACTLY WHAT YOU NEED.
You Don’t Have to Face This Alone
LET US BE YOUR GUIDE
We understand that dealing with the IRS is a stressful experience, especially when you're unfamiliar with the audit process. But with iTax Institute on your side, you’ll have the support and expertise you need to face the audit with confidence.
Get ahead of the game with our preventive services, or get the expert guidance you need if you’re already facing an audit. We’re committed to helping tax professionals like you navigate IRS due diligence audits with ease.
