What the letter means
The IRS Appeals page summarizes it: “You will get this letter with a computation report of proposed adjustments to your tax return. It outlines your options if you don’t agree with the proposed adjustments.” It also states the deadline: “You should file your protest within 30 days from the date of this letter to appeal the proposed adjustments with the Independent Office of Appeals.”
The enclosures listed in IRM 4.19.13.13 are the proposed examination report, Form 886-A (or a program-specific form) explaining disallowed items, Publication 3498-A, and Form 14817, the reply cover sheet. Taxpayers in the secure messaging program receive Letter 525-T instead; IRM 4.19.13.33.1 says it “is used in lieu of Letter 525.”
Why the client got it
Two paths lead here. Most often, the client received an initial contact letter (a Letter 566 or a CP75 for earned income credit cases) and did not respond; IRM 4.19.13.13 says that after the suspense period the campus will “issue the 30-Day letter with proposed examination report.” Otherwise, the client did respond, the documents did not fully support the return, and the examiner issued the report. Some campus programs use Letter 525 with a report as the first contact, so a Letter 525 can arrive without any earlier letter.
Deadlines and what happens if they pass
| Clock | Length | Source |
|---|---|---|
| Respond or request Appeals | 30 days from the letter date | IRS Appeals letters page; Letter 525 |
| Campus suspense before the next letter | 45 days (earliest manual mailing on day 46; automated on day 63) | IRM 4.19.13.2.4 |
| First extension request | Additional 30 days, granted automatically | IRM 4.19.13.11.7 |
| Short statute | No extension if 180 days or less remain, unless the statute is extended | IRM 4.19.13.11.7 |
| Appeals transfer | Needs 13 months or more on the assessment statute, or a Form 872 | IRM 4.19.13.17 |
On extensions, IRM 4.19.13.11.7 says the taxpayer “will be automatically granted an additional 30 days on the first request (from the original response due date shown on Letter 566-S/Letter 566-T, or Letter 525/Letter 525-T, except for requests made after the 90 Day letter).” The exception: “If there are 180 days or less before the Statute of Limitations expires on the case, no extension will be granted, unless Taxpayer agrees to extend the Statute of Limitations.”
If the window passes with no response, IRM 4.19.13.13: “After the suspense period has expired, issue 90 Day, Notice of Deficiency, Letter 3219.” Once that notice issues, a non-docketed Appeals conference is off the table.
How to respond
- Get on the case. File a Form 2848. IRM 4.19.13.11.1 tells examiners that “The POA must be contacted in lieu of the taxpayer when a valid POA is present” and to “Send a copy of any letter mailed to the taxpayer to the taxpayer’s authorized POA or representative on file.”
- Read the Form 4549 and 886-A item by item. Separate adjustments you can document from those that are legal disputes.
- If the client agrees, sign and return the report. If the client agrees with some items, ask for a partial agreement.
- If documents will fix it, send them with Form 14817 by the date on the letter. If the examiner needs more, the next letter is usually a Letter 692 with a revised report, which carries a 15-day response period per the IRS Appeals page.
- If the client disagrees, request Appeals in writing. IRM 4.19.13.17 says the campus needs a “Written Request to transfer from the taxpayer that includes the changes the taxpayer disagrees with and why,” the facts supporting the position and the law relied on, and “If deficiency is $25,000 or less, include Form 12203, Request for Appeals Review.” See Form 12203, the small case request and the formal protest.
- Expect a statute extension request if fewer than 13 months remain on the assessment statute. IRM 4.19.13.17 says the campus then sends Letter 907 and Form 872. See Form 872 extensions.
- Do not ask for Appeals before sending documents. IRM 4.19.13.17 has examiners respond that “Appeals generally cannot consider your case until the IRS has the opportunity to review all your documents.”
The Taxpayer Advocate Service notes that an informal conference with the examiner's manager can be requested before the response date.
What the IRS does next
If the client signs, the campus closes the case agreed and assesses. If documents arrive, the examiner revises the report (Letter 692), issues a no-change, or holds the position. If a complete Appeals request arrives with enough statute time, the campus routes the case to the Independent Office of Appeals. If nothing arrives, the campus issues Letter 3219. See correspondence examinations for the whole sequence.
Related notices
| Letter | What it is |
|---|---|
| Letter 566 | Initial contact asking for documents. |
| Letter 692 / 692-T | Revised report after more information; 15 days to respond. |
| Letter 915 | Office examination's report transmittal (30-day letter). |
| Letter 950 | Field examination's 30-day letter. |
| Letter 3219 | Notice of deficiency from campus examination. |
Questions practitioners ask
How long does the client really have?
The letter gives 30 days. The campus suspense period is 45 days before it can issue the 90-day letter, but relying on the gap is a risk; ask for the automatic 30-day extension instead.
Can we go straight to Appeals?
Yes, with a written request that states the disagreed items, the facts and the law, plus Form 12203 if the amount is $25,000 or less. The campus may first ask for the documents.
What if less than 13 months remain on the statute?
The campus will ask for a Form 872 before sending the case to Appeals. Without it, the case moves to the notice of deficiency.
The client already answered. Why a Letter 525?
Either the reply arrived after the report was generated or the examiner found it insufficient. IRM 4.19.13.11.1 says correspondence received before the Letter 525 date is treated as a reply to a letter without an audit report.
Does signing the report end the matter?
It consents to assessment of the agreed amount. See signing Form 870 or 4549 for what agreement does and does not waive.