IRS Form 13825 Guide: Employee Business Expense Audit Form

1. Introduction: What is Form 13825?

IRS Form 13825, officially titled the Employee Business Expense Questionnaire, is an administrative audit examination document published by the Internal Revenue Service (IRS). The IRS is a bureau of the United States Department of the Treasury responsible for administering the federal internal revenue code and conducting tax compliance audits.

Unlike standard tax forms filed during annual tax season, Form 13825 is an audit questionnaire. It is issued by the IRS Small Business/Self-Employed (SB/SE) or Wage and Investment examination divisions during correspondence audits involving unreimbursed employee business expenses.

When an employee claims tax deductions for vehicle mileage, travel, lodging, tools, or meals on Form 2106 (Employee Business Expenses), the IRS may send Form 13825 to investigate the claim. The form asks specific questions about your job responsibilities, employer reimbursement policies, and travel records to determine whether your claimed deductions are legally allowed.

2. Purpose of the Form

Under Section 162 of the Internal Revenue Code, employees may deduct ordinary and necessary expenses incurred while performing their job duties. However, Section 274 imposes strict recordkeeping and substantiation rules on travel, transportation, meals, and vehicle deductions.

Audits often occur because employee business expenses are among the most frequently miscalculated or unsupported deductions on tax returns. Many taxpayers mistakenly claim their daily commute to work, deduct personal vehicle use, or write off expenses that their employer would have reimbursed if asked.

Form 13825 exists to structure the auditor’s factual review. It provides a standardized framework where the taxpayer discloses their job description, primary work reporting location, and travel destinations. It also analyzes vehicle mileage breakdowns and requires proof of your employer’s reimbursement policy to ensure you did not claim expenses that were not required for your job.

3. Who Needs to File This Form

Form 13825 is an event-driven questionnaire that you should only complete if specifically requested by the IRS. You need to file this form if you meet the following criteria:

• You Received an IRS Audit Notice: The IRS mailed you an examination letter (such as Letter 566-S, Letter 566-T, or Letter 566-CG) requesting that you complete Form 13825.
• Your Form 2106 Deductions Are Under Audit: The IRS is auditing employee business expenses you deducted on Form 2106 or on Schedule A (Itemized Deductions).
• Qualifying Employee Status: You claimed expenses as an eligible employee category—such as an Armed Forces reservist, qualified performing artist, fee-basis state or local government official, or an employee with impairment-related work expenses—or you are resolving a prior-year tax audit.

A separate Form 13825 must be completed for each Form 2106 or Form 2106-EZ attached to the tax return under review.

4. Who Is Exempt / Not Required to File

Because Form 13825 is strictly an audit questionnaire, the vast majority of taxpayers will never need to complete it:

• Taxpayers Without an IRS Audit Letter: The form explicitly instructs taxpayers to submit it only if they received an official IRS letter requesting it. Do not submit this form voluntarily.
• Self-Employed Individuals: Sole proprietors, freelancers, and independent contractors reporting business expenses on Schedule C do not use Form 13825; they use Form 11652 instead.
• Standard Deduction Filers: Taxpayers who claimed the standard deduction rather than itemizing employee expenses on Schedule A are not subject to Form 2106 audits.
• Standard W-2 Employees Under Current Rules: Following the Tax Cuts and Jobs Act (TCJA), unreimbursed employee business expenses are suspended for most regular W-2 employees, meaning they cannot claim Form 2106 unless they belong to an exempt statutory group.

5. When to File

Form 13825 operates on a strict, time-sensitive audit deadline governed by your examination notice:

• Strict 30-Day Window: You must submit Form 13825 within 30 calendar days from the date printed at the top of your IRS audit letter.
• Letter Date Controls: The 30-day countdown begins on the date of the letter, not the day it arrived in your mailbox. If the 30th day falls on a weekend or federal holiday, your deadline extends to the next business day.
• Requesting Extensions: If you need extra time to obtain an official letter from your employer or compile detailed mileage records, call the phone number on your audit letter immediately to request an extension before the 30 days expire.

Failing to respond within this 30-day window will cause the IRS to automatically disallow your entire expense deduction and send an immediate tax bill with penalties and interest.

6. Where and How to File

Form 13825 cannot be submitted through consumer tax preparation software like TurboTax. It is an administrative audit response delivered directly to the IRS examination unit handling your case.

Taxpayers have multiple approved methods to submit the questionnaire:

• IRS Document Upload Tool: If your audit letter provides an access code, you can use the secure IRS Document Upload Tool on the IRS website to upload digital scans or PDF copies of your completed form and receipts.
• Mail or Dedicated Fax: You can mail your printed questionnaire and supporting photocopies, or fax them, to the specific IRS address as per instructions on your audit notice.

Never send original receipts or personal logbooks through the mail. Always send clear photocopies, and write your Social Security Number (SSN) and the audited tax year at the top of every page.

7. Step-by-Step Instructions to Fill the Form

Form 13825 is organized into clear sections covering your employment details, travel records, and vehicle calculations. Review the table below for a section-by-section guide.

Section	Required Information	Filing Instructions
Employee Details	Personal & Work Identifiers	Enter your legal name, 9-digit SSN (without dashes), job title, primary work reporting address, and employer contact information.
Job Responsibilities	Duties & Work Territory	Describe your specific daily job responsibilities. If you were assigned a sales territory or traveling district, detail the geographic boundaries.
Return Figures	Calculation Methodology	Explain exactly how the figures on your Form 2106 were determined (e.g., standard mileage rate based on a daily logbook vs. actual receipts).
Work Locations	Travel & Destinations	Indicate if you were assigned to different locations, listing dates, business trip destinations, conventions attended, and records kept.
Employer Policy	Reimbursement Terms	State whether your employer had an accountable reimbursement plan, whether you received reimbursements, and whether expenses were mandatory.
Vehicle Expenses	Vehicle Data & Mileage	List vehicle year/make/model, date placed in service, and break down total miles into business miles, commuting miles, and personal miles.
Household Vehicles	Household Transport Context	Enter the total number of vehicles available in your household and the number of licensed drivers in your family.

Understanding the Mileage Breakdown Rules

When completing the vehicle section of Form 13825, understanding how the IRS defines mileage is essential:

• Business Miles: Travel between two separate business locations, visits to client sites, or trips to temporary work assignments.
• Commuting Miles: Driving from your home to your primary, permanent reporting work station. Under federal tax law, commuting miles are personal expenses and are never deductible, regardless of distance.
• Other Personal Miles: Running personal errands, weekend trips, and family travel.

8. Required Documents/Information Needed Before Filling

Submitting Form 13825 without supporting documentation will result in an immediate audit disallowance. Assemble the following records before completing the questionnaire:

• The IRS Audit Notice: Your copy of Letter 566 or accompanying Form 886-A showing the tax year under examination.
• Signed Employer Letter: An official statement on company letterhead signed by your employer confirming whether you were required to incur expenses, whether you had an assigned territory, and whether you received reimbursements.
• Contemporaneous Mileage Log: A written logbook, appointment calendar, or digital GPS tracking report showing dates, destinations, business purpose, and miles driven.
• Receipts and Invoices: Itemized receipts for airfare, lodging, meals, tools, uniforms, and professional supplies showing dates, amounts, and business descriptions.
• Vehicle Repair & Inspection Records: Repair invoices or annual state inspection receipts showing your odometer reading at different points in the year to substantiate total miles driven.

9. Common Mistakes to Avoid

Auditors scrutinize employee expenses closely. Avoid these frequent mistakes when completing Form 13825:

• Deducting Commuting Costs: Counting your daily drive between home and your main office as business mileage is the most common reason the IRS disallows vehicle deductions.
• Failing to Provide an Employer Letter: If your employer had a reimbursement policy that you failed to use, you cannot deduct the expense. You must provide a letter proving expenses were non-reimbursable and required for your job.
• Submitting Round-Number Estimates: Reporting exactly 10,000 business miles or round figures like $5,000 for travel suggests you did not keep real records, prompting auditors to reject the claim.
• Sending the Form Without an Audit Letter: Submitting Form 13825 to the IRS when your return is not under audit causes administrative confusion and delays.
• Missing the 30-Day Deadline: Failing to submit your completed packet within 30 days forfeits your right to substantiate the deductions before adjustments are finalized.

10. Penalties for Non-Filing or Errors

Because Form 13825 is an audit response questionnaire, failing to submit it results in direct administrative and financial penalties:

• Total Deduction Disallowance: If you ignore Form 13825, the IRS will disallow 100% of your claimed employee business expenses, increasing your taxable income.
• Compounding Interest: Statutory interest accrues daily on the resulting tax balance due from the original due date of the return until fully paid.
• 20% Accuracy-Related Penalty: Under Internal Revenue Code Section 6662, the IRS routinely assesses a 20% penalty on any underpaid tax resulting from negligence or disregard of tax rules.
• Perjury and Fraud Sanctions: Submitting fabricated mileage logs, altered receipts, or forged employer letters on Form 13825 violates 18 U.S.C. Section 1001, exposing individuals to criminal prosecution, fines, and imprisonment.

11. Related Forms or Schedules

Form 13825 operates alongside several key individual tax schedules and audit documents:

• Form 2106: Employee Business Expenses
• Form 2106-EZ: Unreimbursed Employee Business Expenses (historical)
• Schedule A (Form 1040): Itemized Deductions
• Form 11652: Questionnaire and Supporting Documentation (Schedule C audit questionnaire)
• Form 886-A: Explanation of Items (detailed audit adjustments)
• Publication 463: Travel, Gift, and Car Expenses
• Publication 529: Miscellaneous Deductions
• Publication 535: Business Expenses

12. Frequently Asked Questions

Can regular W-2 employees still deduct business expenses?

Under the Tax Cuts and Jobs Act, miscellaneous itemized deductions subject to the 2% floor—including unreimbursed employee expenses—were suspended for most employees. However, Form 2106 deductions remain available for Armed Forces reservists, qualified performing artists, fee-basis government officials, and employees with impairment-related work expenses.

Why does the IRS require a letter from my employer?

The IRS requires an employer letter to confirm two things: that the expenses were mandatory for your job, and that your employer did not reimburse you. If your employer offers a reimbursement plan and you chose not to claim reimbursement, federal law prohibits you from deducting those expenses.

What counts as an acceptable mileage log?

An acceptable mileage log must be kept contemporaneously (recorded at or near the time of the trip). It must record the date of each trip, starting location, destination, business purpose, and exact mileage. Smartphone GPS mileage tracking reports are accepted if they include these details.

What is the difference between commuting and business miles?

Commuting is travel between your personal residence and your main workplace; it is personal and never deductible. Business mileage is travel from your primary workplace to a client site, travel between multiple job sites in the same day, or trips to temporary assignments outside your metropolitan area.

What should I do if I lost my receipts?

If you lost receipts, you can attempt to reconstruct expenses using bank statements, credit card records, vendor invoices, and electronic toll or parking records. However, under Section 274, the IRS has strict substantiation standards for vehicle and travel expenses, and unsupported estimates are routinely rejected.

Can I complete and submit Form 13825 online?

Yes. If your IRS audit notice includes a secure website address and access code, you can use the IRS Document Upload Tool to submit your completed Form 13825 and upload digital scans of your receipts directly to the examiner.

13. Conclusion: Key Takeaways Summarized

IRS Form 13825 is the essential questionnaire used to defend employee business deductions during an audit. Keeping your records organized ensures you can respond effectively. Remember these core takeaways:

• Audit-Only Document: Submit Form 13825 only if you receive an official IRS examination notice requesting it.
• Strict 30-Day Window: Respond within 30 calendar days from the date on your letter, or call the IRS immediately to request an extension.
• Provide Employer Verification: Secure a signed letter on company letterhead confirming your job duties, travel territory, and non-reimbursement status.
• Substantiate Every Mile: Include a detailed contemporaneous mileage log and vehicle maintenance records to substantiate business travel.
• Submit via Designated Channels: Upload your documents using the online IRS Document Upload Tool or mail photocopies to the specific IRS address as per instructions on your audit notice.