IRS notice
IRS Letter 525: Your Audit Report and the 30-Day Window
The proposed results of an audit, usually one done by mail, with Form 4549. Respond or request Appeals by the date on the letter.
Reply by the date on the notice
The response date on the letter matters most; to have Appeals consider the case before a notice of deficiency, the IRS generally needs your request within 30 days of the letter date.
Letter 525 is the IRS's general 30-day letter: the audit of your return is finished and the examiner is proposing changes, shown on the enclosed Form 4549. You can sign and agree, send more documentation, ask for a conference with the examiner's manager, or request an Appeals conference. Act before the due date on the letter, because the appeal window is generally 30 days from the letter date.
What this notice is telling you
- An examination of your return, usually conducted by mail, has ended with proposed adjustments.
- Form 4549, Report of Income Tax Examination Changes, lists each change and the examiner's reasons.
- The changes can affect the tax you owe or credits you claimed, and may include penalties.
- This is your chance to resolve the audit administratively before the IRS issues a formal notice of deficiency.
What to do
Read Form 4549 item by item
Note which adjustments you accept and which you don't. An audit report often mixes items you can live with and items you can prove.
Send what the examiner didn't have
If an item was disallowed for lack of records, send copies of receipts, statements or logs that support it, with a short explanation, by the due date.
Ask for more time before the deadline if you need it
Call the number on the letter before the due date. Don't let the date pass while you gather records.
Escalate within the exam function
If the examiner still proposes changes after your response, you can ask for a conference with the examiner's manager before the response date.
Request Appeals in writing if it isn't resolved
Put the request in writing with your reasons. If the total proposed tax and penalties for each period is $25,000 or less, Form 12203 or a brief statement can serve as a small case request; larger cases need a formal written protest.
Letter 525 or Letter 915?
The IRS uses two main 30-day letters after an audit. Letter 525 is generally issued when the audit was done by mail; Letter 915, Examination Report Transmittal, generally follows an in-person audit. Both enclose the examination report and both give you the chance to agree or appeal. The distinction matters mostly for what comes next if you don't respond: a Letter 3219 notice of deficiency after a mail audit, or a Letter 531 after an in-person audit.
Small case request or formal protest
| Proposed tax and penalty per period | What to send | Where |
|---|---|---|
| $25,000 or less | Small case request: Form 12203 or a brief written statement of the issues and why you disagree | The address on the letter, not directly to Appeals |
| More than $25,000 for any period | Formal written protest following Publication 5 | The address on the letter, not directly to Appeals |
If you don't respond
If the due date passes without a response, the IRS may disallow the items it questioned and issue a notice of deficiency. That notice gives you 90 days to petition the U.S. Tax Court, or 150 days if it is addressed to you outside the United States. At that point the conversation moves from the examiner to a statutory deadline, so the 30-day stage is the better time to make your case.
If you agree, signing the agreement form lets the IRS assess the tax.
Where this notice sits
- Letter 566
- Letter 525
- CP14
The usual order. Not every account gets every notice, and some steps can be skipped.
Want a CPA to deal with it?
Bring the notice to a free consultation, in person on James Island or by video. We read it with you, tell you what it means for your account and, if you want us to, take over the response once you sign Form 2848.
Tax Controversy — IRS audits, penalty abatement, appeals, and back-tax resolution.
Sources
By Haigler CPA Group. Updated . Notices are revised from time to time, so go by the wording and dates on your own notice. The information on this site is general in nature and is not tax, legal, or accounting advice for your situation. Tax law changes and the right answer depends on facts we would need to review with you. Please speak with a qualified professional before acting on anything you read here.
Questions about Letter 525
What is Form 4549?
Form 4549, Report of Income Tax Examination Changes, comes with Letter 525. It shows each proposed adjustment, the examiner's reasons and the resulting tax and penalties.
Can I talk to the examiner's manager before going to Appeals?
Yes. If you've responded and the examiner still proposes changes, you can request a conference with the examiner's manager before the response date on the letter.
Where do I send my Appeals request for a Letter 525?
To the IRS address on the letter that explains your appeal rights. The IRS asks that you not send it directly to the Independent Office of Appeals.
Can I stop interest while I dispute a Letter 525?
Interest on additional tax generally runs from the return's original due date until paid. The IRS says interest stops accruing on any amount you send as a payment or deposit from the date it receives the money, so a deposit can limit the cost while you dispute.
Other notices
- Letter 950: 30-day letter for an unagreed auditThe IRS 30-day letter for audit changes you haven't agreed to. File a protest to Appeals within 30 days or expect a notice of deficiency.
- IRS notice lookupEvery IRS notice carries a code. Find yours below to see what it generally means, which date matters, and what to do before that date passes.
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