Short answer
Form 886-A, Explanation of Items, is the IRS examiner’s written reasoning for each change in your audit report: the facts, the law and the IRS’s conclusion. It is not a bill, has no signature line and no deadline of its own. Your deadline is on the cover letter, and any protest should answer the 886-A issue by issue.
Key takeaways
- Form 886-A explains the adjustments on the audit report (Form 4549 or 4549-A); you never sign it.
- The IRS manual requires each explanation to state the facts, including facts in your favor, the law and the IRS’s conclusion.
- Your response date comes from the cover letter, generally 30 days for a 30-day letter.
- Appeals will not raise issues the examiner left out of the report or rebuttal, so the 886-A frames the whole dispute.
What Form 886-A is and who prepares it
Form 886-A, Explanation of Items, is the written reasoning behind an IRS audit report. The examiner who audited your return prepares it and attaches it to the report, usually Form 4549 or Form 4549-A, which shows the numbers. The 886-A explains why each number changed. It is not a bill, has no signature line and asks nothing of you.
The IRS manual treats this explanation as part of your rights. IRM 4.10.8 (Report Writing, revised August 28, 2025) says audit reports protect your “Right to be Informed” and “should contain all the information necessary to ensure a clear understanding of the adjustments.” It also says reports, “unlike workpapers,” are “legally binding documents” that serve as the basis for assessment and collection.
Not every audit uses a separate 886-A. How the explanation arrives depends on who examined you:
| Audit type | How the explanation usually appears | IRS manual |
|---|---|---|
| Office or mail audit | Standard explanations printed by the IRS report software. The software fits up to three per adjustment; if more are needed, they go on a Form 886-A attached to the report. | IRM 4.10.10.2; IRM 4.10.8.12.4 |
| Field audit by a revenue agent | A copy of the examiner’s lead sheet for each issue, edited down to the conclusion, facts, law and your position | IRM 4.10.8.12.4 |
| Large business audit (LB&I) | A separate Form 886-A for each adjusted issue; required for every unagreed issue | IRM 4.46.6.13 |
| After you file a protest | The examiner’s rebuttal, written on Form 886-A, with a copy sent to you | IRM 4.10.8.12.9.3 |
Whatever the label, it is the IRS’s case for each change. For the rest of the package, see Form 4549 and the audit letter lookup.
Why you received it
You get an explanation of items when the examiner proposes to change your return. It normally comes in one of these packages:
- A 30-day letter. Letter 525 (mail audits), Letter 915 (office audits) or Letter 950 (field audits) sends the report, the explanations and Publication 3498. See the 30-day letter and Letter 950.
- A rebuttal. If you protested and raised new facts or arguments, the examiner may answer them on Form 886-A before the case goes to Appeals. You get a copy with Letter 5072, Examiner’s Rebuttal.
A CP2000 is different. It is an automated income-matching notice, not an audit, and it explains its changes on the notice itself.
How to read it, part by part
The IRS manual sets a format for each issue. Field lead sheets use conclusion, facts, law and taxpayer’s position (IRM 4.10.8.12.4); LB&I uses the same parts plus a separate argument (IRM 4.46.6.13).
| Part | What the manual requires | What to check |
|---|---|---|
| Issue title and amounts | Numbered and titled to match the adjustment on the report, with the amount per return, the amount per audit and the difference | Each number matches the line on Form 4549 or 4549-A and your return |
| Facts | A narrative stated “accurately and objectively,” including facts “favorable to both the IRS’s and taxpayer’s position” | Anything wrong or missing, including documents you sent that are not mentioned |
| Law | The code sections and authorities relied on, correctly cited; for disallowed business expenses, for example, IRC 162(a) and IRC 6001 (lack of substantiation) | Whether the rule cited fits your facts and your tax year |
| Taxpayer’s position | Your position “if known,” with any authority you cited; a written statement you gave is included or summarized | Whether your side is described fairly and completely |
| Argument and conclusion | How the IRS applies the law to the facts, and a brief statement of its position | The exact reason for the change, which is what you have to answer |
Two things that are easy to miss
- Alternative positions. The examiner may state a second ground for the same adjustment, such as treating an activity as not engaged in for profit under IRC 183, with ordinary business-expense rules under IRC 162 as the fallback. The manual says all alternative positions must be addressed in the report “or Appeals will not raise them.” Answer every position you see, not just the first.
- Penalties. Penalties are explained in the same way. The manual reminds examiners that penalties needing written supervisory approval under IRC 6751(b) “cannot be asserted” without it.
The deadline comes from the cover letter
Form 886-A has no due date of its own. Your deadline is printed on the letter it came with:
- 30-day letter: Publication 3498 says you “generally have 30 days from the date of the letter” to accept the changes or appeal them.
- Partial agreement package: the IRS manual tells examiners to give a response date, “generally 15 days.” That is internal practice; the date on your letter controls.
- Notice of deficiency: if it gets that far, IRC 6213(a) gives 90 days (150 if addressed outside the US) to petition the Tax Court. See notice of deficiency.
Using Form 886-A to build your protest
The 886-A also sets the boundaries of the appeal. Under IRS Policy Statement 8-2, Appeals “will not raise new issues,” and the Appeals manual defines a new issue as one “not raised by Compliance in the report (e.g., 30-Day Letter) or rebuttal” (IRM 8.6.1.7). In practice, the issues in your 886-A are the issues Appeals will consider. Answer each one.
If the tax and penalties for each period are $25,000 (IRS.gov, 2026) or less, a short small case request is enough. Above that, Publication 5 requires a formal written protest, and the 886-A gives you its outline:
- List the issues in the 886-A’s order. Use the same numbers and titles, with the tax period and the proposed change for each. Mark which you accept and which you dispute.
- Answer the facts. For each disputed issue, say which facts in the 886-A are wrong or incomplete and give the correct ones, with each supporting document numbered as an exhibit.
- Answer the law. Say why the code section or ruling cited does not apply, or applies differently, and cite any authority you rely on. Publication 5 asks for “law or authority, if any.”
- Answer every alternative position and penalty. A protest that skips one leaves it unanswered.
- State what you want. For example, that the deduction be allowed in full or the penalty removed.
- Sign the penalties-of-perjury statement. Publication 5 gives the exact wording, with separate versions for a representative.
Before you send it, give the examiner anything you have not shown them. Publication 5 says new information raised first at Appeals may have to go back to the examiner, which slows the case. Our formal protest letter template follows this structure, and agree or appeal helps you decide whether to protest at all.
Your options after reading it
| If, after reading the 886-A, you | What to do | What happens next |
|---|---|---|
| Agree with every change | Sign the agreement form that came with the report (Form 4549, or Form 870 with a 4549-A) | The IRS assesses the tax and bills you for any unpaid amount |
| Agree with some changes | Ask for a partial agreement covering only those items, usually on Form 870 | The agreed part is assessed; the rest stays in dispute |
| Think the facts are wrong and can prove it | Send the examiner the documents and a short explanation before the due date | The examiner may revise the report |
| Disagree about the law or a judgment call | File a small case request or formal protest by the date on the letter | The case goes to the IRS Independent Office of Appeals |
| Do nothing | Nothing | A notice of deficiency, then assessment if you don’t petition the Tax Court |
Number each enclosure to match the 886-A issue; see the audit response cover letter. Keep copies of everything and proof of when you mailed, faxed or uploaded it.
Mistakes to avoid
- Answering in general terms. “I disagree with the audit” does not answer a specific finding. Respond issue by issue.
- Skipping the facts section. If the 886-A leaves out a document you sent, say so and send it again.
- Arguing outside the tax law. Publication 3498 says you cannot appeal “based only on moral, religious, political, constitutional, conscientious, or similar grounds.”
- Saving evidence for Appeals. Give it to the examiner first.
Doing it yourself, free help, and representation
A one- or two-issue 886-A about missing receipts is often something you can answer yourself. Help is worth more when it cites case law, proposes penalties or alternative positions, or covers several years or a business.
- Low Income Taxpayer Clinics represent eligible taxpayers in audits and appeals for free or a small fee.
- The Taxpayer Advocate Service (877-777-4778 (IRS.gov, 2026)) helps when an IRS problem is causing financial hardship.
- An attorney, CPA or enrolled agent can answer the examiner and write the protest for you under a Form 2848.
Global Gate Tax Relief’s team includes licensed tax attorneys, enrolled agents and CPAs. In a free consultation it reads your report and 886-A and tells you whether you can answer it yourself; if it takes the case, it quotes a flat fee upfront and promises no outcome. Request a free review or call 1-877-800-8180.
Frequently asked questions
Form 886-A, Explanation of Items, is the IRS examiner’s written explanation of the changes in your audit report. For each adjustment it generally gives the facts, the law relied on, your position if known and the IRS’s conclusion.
No. It has no signature line. You sign only the agreement form, such as Form 4549 or Form 870, and only for changes you agree with. Your response deadline is the one on the cover letter.
Form 4549 shows the numbers: each adjustment, the corrected tax, penalties and the balance. Form 886-A explains why each adjustment was made. Signing Form 4549 is an agreement; Form 886-A is only an explanation.
You can raise your own arguments; the limits on new issues apply to the IRS. Appeals will not raise issues the examiner did not put in the report or rebuttal. New evidence, though, usually goes back to the examiner for comment first, so share it early.
Tell the examiner in writing before the due date, with documents that show the correct facts. If the examiner does not change the report, put the correction in your protest; the manual requires facts favorable to you to be included too.
Sources
- IRM 4.10.8, Report Writing (08-28-2025)
- IRM 4.10.10, Standard Paragraphs and Explanation of Adjustments (09-27-2024)
- IRM 4.46.6, Workpapers and Reports Resources (LB&I), 4.46.6.13 Explanation of Items: Form 886-A
- IRM 8.6.1, Conference and Issue Resolution, 8.6.1.7 New Issues and Reopening Closed Issues
- IRS Publication 5, Your Appeal Rights and How to Prepare a Protest (Rev. 4-2021)
- IRS Publication 3498, The Examination Process (Rev. 5-2025)
- 26 U.S.C. 6213, Restrictions applicable to deficiencies; petition to Tax Court
- IRS: Low Income Taxpayer Clinics
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