Correspondence examinations: how the campus audit runs from Letter 566 to the notice of deficiency

Who runs it

Correspondence exams are worked by tax examiners and correspondence examination technicians in the campuses, under IRM 4.19.13, General Case Development and Resolution. The field manual discourages correspondence work in area offices: IRM 4.10.3.17 says cases worked by correspondence should go to tax compliance officers or revenue agents only when no trained tax examiners are available. The issues are usually narrow (a credit, a deduction, a filing status) and the process is driven by letters and automated suspense dates, much of it through the Automated Correspondence Exam (ACE) system. Replies that need technical review are assigned first in, first out (IRM 4.19.13.11).

The letter sequence

1. Initial contact letter. Under IRM 4.19.13.8, the campus sends a letter explaining the issues under examination. If it is only requesting information, it uses the program's initial contact letter or Letter 566-S. If it is proposing changes and asking for agreement or verification, the letter comes with Form 4549, Income Tax Examination Changes. A copy goes to an authorized representative with Letter 937.
2. 30-day letter. If the initial letter is not answered by the end of its suspense period, IRM 4.19.13.13 calls for Letter 525, General 30 Day Letter, with the proposed report, Form 886-A explanations, Pub 3498-A and Form 14817, Reply Cover Sheet.
3. Additional findings. If the taxpayer replies but the documents do not resolve the issue, the campus sends Letter 692-M or 692-T with a revised report if needed. If a reply comes in with too little documentation after a report was sent, the examiner is told to try to reach the taxpayer by phone (not required in a secure messaging case).
4. Notice of deficiency. If the 30-day letter is not answered, the campus issues Letter 3219, the statutory notice of deficiency, with the report and Form 886-A containing standard, non-soliciting explanations. Copies of prior letters are not included and documentation is not solicited.
5. Default. If no petition is filed and no reply comes in by the end of the suspense period, the case closes by default and the tax is assessed.

Suspense periods

Each letter sets an internal suspense period before the next action. The table below is from IRM 4.19.13.2.4 (rev. 01-23-2026). The days run from the date of the letter.

The practical lesson is that the response date printed on the letter is not the date the case moves. The system waits longer than the letter says, but you should not plan around that gap: a reply that arrives after the next letter has been triggered to print is harder to fold back into the case.

Responding

Pub 3498-A (Rev. 5-2021) tells taxpayers to send photocopies, not originals: “Please do not send original documents.” If faxing, put the taxpayer's name and SSN on every page so the pages stay with the case. If the documentation is too voluminous to fax or mail, call the number on the letter; the campus may ask for an itemized list first. The Documentation Upload Tool and, for invited cases, Taxpayer Digital Communication secure messaging are alternatives. Under IRM 4.19.13.33, TDC is by invitation only for selected project codes, and the representative can join only after the client signs up.

When a reply arrives, the campus is supposed to associate it with the case within five business days. If a reply sits for 30 days, IRM 4.19.13.11 calls for an acknowledgment letter and says “every effort must be made to respond within 30 days.” In practice, during peak periods the interim letter (CP 3500) gives a later date. A signed agreement is not treated as correspondence: if the client signs the report and attaches documents, the campus works it as a reply, not as an agreement, so do not attach arguments to a report your client is signing.

Write the response to the issues on the letter. A cover letter that identifies each adjustment, the documents that support it and the result you are asking for is easier for a first-in, first-out reader than a stack of receipts. Our response cover letter template works for campus replies as well as IDRs.

Getting more time

Under IRM 4.19.13.11.7, “the taxpayer will be automatically granted an additional 30 days on the first request” measured from the response date on Letter 566 or Letter 525. SB/SE campuses answer every extension request with Letter 686-B within three business days, stating whether it was granted. Later extensions are judgment calls. Two limits matter. First, if 180 days or fewer remain on the assessment statute, no extension is granted unless the taxpayer also extends the statute. Second, once the notice of deficiency is out, an extension only gives more time to send documents; it does not extend the Tax Court deadline.

Getting to Appeals

Before the notice of deficiency, a taxpayer can ask for an Appeals conference, but the campus will not send a case to Appeals just because it is asked. IRM 4.19.13.17 sets three tiers. If the taxpayer has not provided any documentation, the campus explains that Appeals generally cannot consider the case until the IRS has reviewed the documents. If documents were provided but the request does not identify the disputed issues and the taxpayer's position, the campus asks for a written request stating the changes in dispute, the facts and the law. If the request has all of that (or a completed Form 12203 where the deficiency is $25,000 or less), the case is routed to Appeals. See small case requests and formal protests.

If fewer than 13 months remain on the assessment statute, the campus sends Letter 907 with Form 872 and Pub 1035 before it will transfer the case.

After the notice of deficiency

The notice of deficiency changes the rules. IRM 4.19.13.17 says: “Once a case is in status 24, it cannot be forwarded to Appeals as non-docketed.” The route to Appeals is a Tax Court petition. The campus will still look at documents sent after the notice, and if they support a change it can issue a corrected report, but the response letter (Letter 555) carries a standard paragraph: “You may continue to work with us to resolve your tax matter, but we cannot extend your time to petition the U.S. Tax Court.” If the 90 days pass without a petition, the case defaults and documents sent later are handled as an audit reconsideration. The petition deadline and how it is computed are covered in the notice of deficiency and Tax Court petitions.

The campus letter also cites IRC 7803(e)(4) and (5): a taxpayer may request an Appeals hearing on a 90-day case without petitioning, and if the request is denied the IRS must give written notice of the denial. That is not a substitute for a timely petition.

Moving the case to an office

Representatives sometimes ask to move a campus case to an area office for a face-to-face exam. IRM 4.19.13.16 treats this skeptically: the campus first calls to ask why and to offer assurance the issue can be resolved by mail. A case needs at least 13 months on the statute (or a signed Form 872) to transfer. Voluminous records lead first to a request for an itemized list, and if the list shows a sample can be tested the case stays in the campus. A transfer is more realistic when the issue is too complex for correspondence, and it needs a written request and manager approval. After the notice of deficiency, a transfer request is answered with Letter 555 offering a petition or a rescission; rescission is offered only if the new information shows the tax due is less than the notice amount.

Reaching a person

The reason a campus case feels automated is that it is. IRM 4.19.20.1.1 explains that the Automated Correspondence Exam system “was created to process specified cases with minimal to no tax examiner (TE) involvement until a reply is received from the taxpayer”, and that it runs the case from the initial contact letter through the notice of deficiency to closing. Until a reply posts, no examiner is assigned, which is why the opening letters name “Tax Examiner” as the contact with a toll-free number rather than a person. IRM 4.19.13.2.3 says that letters on cases in the corporate inventory carry the operating division's toll-free number and a site identification number, and that once a letter is sent in reply to the taxpayer's correspondence, “the letter, case history, and all letter attachments must identify the originating tax examiner to provide information for any subsequent contact, if needed.” A written reply is therefore the only way to get a named examiner on the case.

The phone call the IRM requires runs in the other direction. IRM 4.19.13.11.1 instructs examiners: “Attempt to contact the taxpayer or authorized Power of Attorney (POA) by telephone when the information provided is insufficient, and an audit report has been sent. The POA must be contacted in lieu of the taxpayer when a valid POA is present.” If the call succeeds, the examiner explains what is missing and must “Negotiate with the taxpayer to agree on a mutually acceptable date by which the taxpayer will send the additional documentation”, and no Letter 692 is sent; if it fails, Letter 692 goes out with a copy of the report. A Form 2848 on the CAF converts that required call into a call to you, so file it with the first reply and put a direct line on the cover sheet. A reply that arrives before a report has been issued triggers no call; if the documents are insufficient the campus simply issues Letter 525 with a report.

The campus tracks the case by AIMS status, and knowing the status tells you where a reply will land: status 22 after a report has gone out with Letter 525, status 23 after a Letter 692 with a revised report, status 25 after a Letter 692 without revision or a successful call, status 24 once the notice of deficiency issues, and status 51 when the case closes. The ASED cuts the sequence short: “If less than 45 days remain on the ASED, do not issue a new Letter 692. Issue a SNOD (90-day) letter.” A client whose statute is close will skip straight from the first report to the notice of deficiency, so ask for the ASED on the first call.

Other routes to a person: Exam Text Chat on irs.gov lets a taxpayer with an exam letter “request to chat/text with a live assistor” after the scripted questions, and an authenticated chat can discuss the account (IRM 4.19.13.34). The Taxpayer Advocate Service takes a case when it meets the criteria in IRM 13.1.7 and the issue “cannot be resolved the same day”, meaning within 24 hours; the campus prepares Form 911, or the practitioner files one directly (IRM 4.19.13.26). And when a notice comes back undeliverable, IRM 4.19.13.15 requires that “All undeliverable certified or registered mail (and the envelope it came in), must be associated with the case file” and allows reissue of a notice of deficiency when the IRS made a typographical error in the address or had received a new address before the notice went out; if a client's notice was returned, ask for the envelope and the address research before conceding the mailing date.

What is not available

Fast Track Settlement is not available for campus cases: Rev. Proc. 2017-25 excludes “Correspondence examination cases worked solely in a Campus/Service Center site.” Mediation and the group manager conference that field cases offer are also not part of the campus flow, although the taxpayer can ask for a conference with a manager under Pub 3498-A. What the campus does offer is a telephone conference with an examiner after documents are submitted.

Questions practitioners ask