In the past, IRS rarely audited US Citizens who filed tax returns from abroad. This may, however, soon change due to a recently authorized increase in funding and staff in the IRS international tax department [http://www.ombwatch.org/node/10201 and http://www.journalofaccountancy.com/Web/20103170.htm].
We have been recently provided with the document used by the IRS to conduct audits of Form 2555, which is filed to claim the Foreign Earned Income Exclusion (FEIE). This audit is normally conducted by post and the IRS makes its decision based on the answers and supporting documents supplied by the taxpayer.
The following form is used by the IRS to audit expatriates claiming the FEIE. Download and examine it to determine if you have adequate support for your Form 2555 in case you become subject to an income tax audit by the IRS in the future.
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If you find yourself subject to an IRS audit for any reason, let us know - we can help. We have helped many taxpayers (including expatriates) before the IRS on audits involving numerous issues in the Tax Code and have an excellent track record of success for our clients.