IRS Letter 525: The 30-Day Letter After a Mail Audit
IRS Letter 525, the General 30-Day Letter, arrives when a mail audit ends with proposed changes. Form 4549 inside shows the adjustments. The routes are to sign and agree, send more support, or ask for an Appeals conference, which the IRS says to request within 30 days of the letter date. Silence leads to a statutory notice of deficiency.
The IRS has no “Understanding your Letter 525” page; the usual address returned an error during this review. This guide relies on the IRS Appeals list of letters with appeal rights, two Taxpayer Advocate Service pages, Publications 3498-A and 5, IRM 4.19.13, and 26 U.S.C. §§ 6212 and 6213.
Deadline to know: The IRS Appeals page says to file a protest “within 30 days from the date of this letter.” If the letter goes unanswered, IRM 4.19.13.13 has the IRS issue Letter 3219, a notice of deficiency, and § 6213(a) then allows 90 days (150 days if addressed outside the United States) to petition the Tax Court.
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What Letter 525 is
The IRS Appeals page describes Letter 525 as the letter “with a computation report of proposed adjustments to your tax return,” which “outlines your options” for disagreeing. The Taxpayer Advocate Service (TAS) groups it with Letter 915 as the 30-day letters issued “when the audit of your tax return results in proposed adjustments,” and says Letter 525 is generally used when the audit was conducted by mail and Letter 915 when it was in person.
That makes it the second stage of a correspondence exam. The first stage, an initial contact letter asking for records, is covered in the Letter 566 guide; Letter 525 is the examiner’s proposed answer. Other 30-day letters exist, such as Letter 915 for in-person audits and Letter 950, which the IRS Appeals page lists separately and which is explained in the Letter 950 guide.
Why it was sent
IRM 4.19.13 shows two common paths. If the initial contact letter drew no reply, the campus mails Letter 525 once the waiting period ends (IRM 4.19.13.13). If a reply came in but did not let the examiner close the case with no change, or the taxpayer agreed by phone or mail, the examiner sends Letter 525 with Form 4549 (IRM 4.19.13.11.1). Taxpayers using the IRS Secure Messaging program receive Letter 525-T instead. TAS also suggests first checking the return address to confirm the letter is from the IRS.
What comes in the envelope
According to TAS, the letter and its report “should identify the specific items the examiner is proposing be adjusted and provide an explanation as to why.” IRM 4.19.13.13 lists the package for a no-reply case:
| Enclosure | Role |
|---|---|
| Form 4549, Report of Income Tax Examination Changes | The proposed adjustments (TAS) |
| Form 886-A, Explanation of Items | Reasons for each disallowed item (IRM) |
| Publication 3498-A | The mail audit process and appeal steps (IRM) |
| Form 14817, Reply Cover Sheet for Exam Correspondence | Cover page for a reply (IRM) |
TAS calls the 30-day letter “your opportunity to review these changes and determine if you agree or disagree.”
The three ways to respond
- Agree. Publication 3498-A says to sign the agreement page, pay any added tax, penalties and interest, and return both to the address on the letter. Signing without paying brings a bill, and Publication 594 covers collection. Where the report shows a refund, the signed page alone goes back, and the refund is expected in 6 to 8 weeks unless other debts absorb it.
- Disagree and add support. Leave the agreement page unsigned and send documents with an explanation by the due date. If the examiner revises the report, IRM 4.19.13.11.1 calls for Letter 692 with a new Form 4549, and the IRS Appeals page gives Letter 692 a 15-day protest window.
- Ask for a conference or Appeals. Publication 3498-A offers a telephone conference with the examiner, an informal conference with the examiner’s manager, and an Appeals conference, each requested before the date in the letter. TAS says the Appeals request should be in writing with the reasons for disagreeing. The IRS audits page also mentions mediation through alternative dispute resolution.
Timing matters for new evidence. Publication 3498-A says supporting information “should have been provided to the examiner during the audit,” and that substantial new documentation sent later returns the case to the examiner. IRM 4.19.13.17 tells examiners that Appeals “generally cannot consider your case until the IRS has the opportunity to review all your documents.”
Interest while the dispute is open
Publication 3498-A says interest keeps accruing on unpaid amounts until the disagreement ends, and that paying the full proposed tax, penalties and interest stops it. It names two kinds of payment for that purpose, a “deposit” and an “advance payment,” and says the letter sent with the report carries the payment instructions.
Requesting Appeals: small case or formal protest
Publication 5 says an Appeals conference is requested in writing, sent “to the IRS address in the letter you received within the time limit specified in the letter.” The dollar amount per tax period decides the format:
| Amount in the letter, per tax period | What Publication 5 allows |
|---|---|
| $25,000 or less | Small case request: a brief written statement of the disputed issues and why, the appeal form sent with the letter, or Form 12203, Request for Appeals Review |
| More than $25,000 | Formal written protest; if any one period is over the line, the formal protest covers every period involved |
The sources measure that $25,000 differently. Publication 5 and TAS count tax and penalties. Publication 3498-A counts “tax, penalties, and interest.” Publication 5 also says the letter proposing the changes may contain important information about the appeal rights for that type of case.
A formal protest, per Publication 5, states the wish to appeal and includes name, address and daytime phone; each disputed issue, period and proposed change with the reasons for disagreeing; supporting facts; any law or authority relied on; and a signed penalties of perjury statement. Publication 3498-A adds that grounds must fall “within the scope of the tax laws,” not moral, religious, political or similar objections.
The statute of limitations check
Publication 5 says IRS policy may require more than 365 days left on the assessment statute before Appeals takes an examination case, and that Appeals “will not accept your case” if a requested extension is declined. Under IRM 4.19.13.17, when less than 13 months remain, the campus sends Letter 907 with Form 872 and Pub 1035. The IRS audits page notes that agreeing to extend is not required, but without it the auditor decides on the information already provided.
Weighing a protest or a small case request?
An attorney can read the Form 4549 report and explain the appeal formats and deadlines that apply to it.
If there is no response: the notice of deficiency
TAS says the IRS “may disallow what you claimed” and issue a Notice of Deficiency, Letter 3219 after a mail audit or Letter 531 after an in-person one. IRM 4.19.13.13 makes it a set step: once the suspense period expires with no reply, issue Letter 3219 with the examination report, Form 886-A and Publication 3498-A. Its suspense table lets that letter go out no earlier than day 46, an internal rule that does not lengthen the reply time.
Section 6212(a) authorizes the notice by certified or registered mail. Section 6213(a) gives 90 days after mailing, or 150 days for a notice addressed outside the United States, to petition the Tax Court, and bars assessment until that period ends or a Tax Court decision becomes final. Publication 3498-A says the IRS cannot extend the petition time and that without agreement or a petition “the tax will be assessed”; Publication 5 says a bill then follows.
- Appeals closes as a direct route. IRM 4.19.13.17 says a case at the notice of deficiency stage “cannot be forwarded to Appeals as non-docketed”; a Tax Court petition is required.
- Extensions shrink. After the notice, IRM 4.19.13.11.7 says extra time covers documents only and “will not extend the time to petition Tax Court.”
- Court choices. Publication 3498-A describes simplified Tax Court procedures for disputes of $50,000 or less per year, with no appeal of the decision.
The IRM for the underreporter program uses CP 3219A for its statutory notice and also calls it the “90-Day Letter.” How that type of notice works is set out in the CP3219A notice of deficiency guide.
When an attorney matters
Publication 1 lists the rights to an impartial administrative appeal and to retain a representative. Publication 5 says a taxpayer may handle the appeals conference personally or appoint “a person authorized to practice before Appeals” such as an attorney, CPA or enrolled agent. Publication 3498-A is narrower: “Only attorneys, certified public accountants, or enrolled agents” may represent there. Differences between roles appear at specific points:
- Power of attorney. For a representative to attend Appeals without the taxpayer, Publication 5 requires a completed power of attorney such as Form 2848, which the Form 2848 instructions say also lets the representative receive confidential tax information.
- Unenrolled preparers. The Form 2848 instructions bar them from representing before appeals officers and from extending the assessment period or executing waivers, which bears on a Form 872 request.
- Tax Court. The Tax Court admits attorneys by application with a certificate of good standing; a nonattorney must satisfy the requirements of its Rule 200, and those who pass the Nonattorney Exam then undergo a character and fitness review.
- Privilege. Section 7525 extends attorney-style confidentiality to other federally authorized practitioners only in noncriminal tax matters and proceedings.
Publication 1 also points to Low Income Taxpayer Clinics. Role differences are compared in the attorney vs CPA vs enrolled agent guide.
Related guides
Frequently Asked Questions
How long is there to respond to Letter 525?
The IRS Appeals page says to file a protest within 30 days from the date of the letter, and TAS says an Appeals conference generally has to be requested within that window. The due date printed on the letter is the controlling date.
Can more documents be sent after Letter 525?
Yes. TAS and Publication 3498-A both describe sending documentation or an explanation by the due date. If the examiner revises the report, IRM 4.19.13.11.1 calls for Letter 692 with a new Form 4549.
Is Form 12203 enough to appeal Letter 525?
For smaller cases. Publication 5 allows a small case request, including Form 12203, when tax and penalties for each period total $25,000 or less. Above that line, a formal written protest covers all periods involved.
Is Letter 525 a bill?
No. It proposes changes. Publication 3498-A says agreeing without paying leads to a bill, and Publication 5 says a bill follows when a notice of deficiency is not petitioned in time.
What happens if Letter 525 is not answered?
Under IRM 4.19.13.13, the IRS issues Letter 3219, a statutory notice of deficiency. Section 6213(a) then allows 90 days, or 150 days if the notice is addressed outside the United States, to petition the Tax Court before the tax can be assessed.
Review a Letter 525 while the 30 days run
A free, confidential evaluation can help sort out which response route the rules make available.
Ray Neu
Ray Neu is the publisher of IRSAttorneys.net. A former law enforcement officer with a background in criminal justice and digital publishing, he oversees editorial direction, partnership standards, and compliance review for the site. He is not an attorney and does not provide legal advice; all tax law content is sourced and reviewed against the standards documented on the Editorial Team & Standards page.
Sources
- IRS Independent Office of Appeals: Letters and notices offering an appeal opportunity
- Taxpayer Advocate Service: Letter 525, General 30-Day Letter
- Taxpayer Advocate Service: Audit report letter giving taxpayer 30 days to respond
- Publication 5, Your Appeal Rights and How to Prepare a Protest
- Internal Revenue Manual 4.19.13 (correspondence examination case development)
- Publication 3498-A (examinations by mail)
- 26 U.S.C. § 6212, Notice of deficiency
- 26 U.S.C. § 6213, Restrictions applicable to deficiencies; petition to Tax Court
- Internal Revenue Manual 4.19.3, IMF Automated Underreporter Program
- IRS audits (irs.gov)
- U.S. Tax Court: Guidance for practitioners
- Form 2848 instructions (power of attorney)
- 26 U.S.C. § 7525 (practitioner privilege)
- Publication 1 (taxpayer rights)
IRS Circular 230 Disclosure: To ensure compliance with Treasury Department rules governing tax practice, any tax information contained on this website was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty. You should consult a licensed tax professional regarding your individual situation.
Results described on this website are not a guarantee, warranty, or prediction of the outcome of any tax matter. Every situation is different. Prior results do not guarantee a similar outcome. Article content reflects general information about federal tax procedure as of the last reviewed date and may not reflect subsequent changes in IRS policy, regulations, or case law.