Letter 525 is called the General 30-Day Letter. It comes near the end of an IRS audit, most often one conducted by mail, together with a report showing the changes the examiner proposes to your return. The letter explains your choices and gives you a deadline, generally 30 days from the letter date. It is still a proposal: the tax is not assessed yet, and you can agree, push back with more proof, or take the dispute to the IRS Independent Office of Appeals, which is separate from the examiners.
Why you got a Letter 525
The IRS finished examining your return, reviewed what you sent (or noted that you sent nothing), and concluded that changes are needed. Those changes may increase your tax or reduce credits you claimed. According to the Taxpayer Advocate Service, Letter 525 is generally used when the audit was conducted by mail, and Letter 915 when it was conducted in person. Both are 30-day letters.
Common situations:
- You didn't respond to the first audit letter, such as Letter 566, so the items were disallowed.
- Your documents didn't fully support the items, in the examiner's view.
- Some items were accepted and others weren't.
What the Letter 525 says
Look for:
- The letter date and response date.
- The examination report, usually Form 4549, Report of Income Tax Examination Changes. It lists each adjusted item, the old and new amounts, the tax change, and any penalty. An explanation of the changes may be attached.
- An agreement section to sign if you accept the changes.
- Your options if you disagree, including how to request an Appeals conference.
- Contact information for the examiner or the campus office.
What to do
- Note the response date. Generally it is 30 days from the letter date.
- Read the report line by line. Compare each adjustment with your records and what you already sent.
- Decide: agree, partly agree, or disagree.
- Respond in writing by the date, using the address or fax on the letter. Keep copies and proof of sending.
If you agree
Sign and return the agreement form. Publication 3498-A says to pay what you can with it; if you don't pay, you will get a bill. If you can't pay in full, set up a payment plan. If the report shows a refund, sign and return it; the IRS says refunds usually arrive in 6 to 8 weeks if you have no other debts it must collect.
If you disagree and have more proof
Don't sign. Send documentation and a clear explanation for each item you dispute. If you need more time, call the number on the letter before the due date. Under the IRS's internal procedures, a first request is generally granted for an extra 30 days. That procedure does not apply once a notice of deficiency has been issued.
If you still disagree: managers and Appeals
You have two levels to try before court:
- Ask for a conference with the examiner's manager before the response date.
- Request an Appeals conference in writing before the response date, explaining why you disagree.
What you send to Appeals depends on the amount, per Publication 5:
| Proposed tax and penalties per tax period | What to send |
|---|---|
| $25,000 or less | A small case request: a brief written statement listing the disputed items and why, or Form 12203, Request for Appeals Review |
| More than $25,000 (any period) | A formal written protest, including your reasons, facts, law and a signed penalties of perjury statement |
Appeals can only consider arguments based on tax law, not moral, religious, political or constitutional objections. Publication 3498-A notes that only attorneys, CPAs and enrolled agents may represent you at an Appeals conference. If you bring substantial new documents, Appeals may send the case back to the examiner first.
Interest keeps building on any tax you end up owing while you dispute it. Publication 3498-A explains that you can stop interest on the proposed amount by making a payment designated as a "deposit" or an "advance payment." A tax professional can help you choose.
What happens if you ignore it
If you don't respond by the date, the IRS issues a statutory notice of deficiency by certified mail (Letter 3219 for audits by mail, according to TAS). You then have 90 days, or 150 days if the notice is addressed to you outside the United States, to petition the U.S. Tax Court without paying first. That deadline can't be extended. Our CP3219A page explains how petitions, the filing fee and small cases work. If you neither agree nor petition, the tax is assessed and collection notices follow. Afterward, audit reconsideration is still possible but slower.
Is this letter real?
A Letter 525 follows an audit you should already know about. Check that the return address is the IRS, and confirm by calling a number listed on irs.gov. The IRS doesn't demand payment by gift card, prepaid debit card or wire transfer. See how to spot IRS scams.
Frequently asked questions
What's the difference between Letter 525 and Letter 950?
Both are 30-day letters with an audit report. Letter 525 is generally used for audits by mail. Letter 950 is generally used after an in-person field examination.
Can I partly agree?
Yes. Explain which items you accept and which you dispute, with documents for the disputed ones. An Appeals request can cover only the issues you disagree with.
Do I need a lawyer for Appeals?
No. You can represent yourself. If you want someone to represent you, it must be an attorney, CPA or enrolled agent. A Low Income Taxpayer Clinic may help if you qualify. See choosing a tax professional.
What if I miss the 30 days?
Call the number on the letter right away. If a notice of deficiency has already been issued, focus on its Tax Court deadline, which cannot be extended.
Sources
- Internal Revenue Service (IRS), "Letters and notices offering an appeal opportunity". irs.gov
- Taxpayer Advocate Service (TAS), "Letter 525, General 30-Day Letter". taxpayeradvocate.irs.gov
- IRS, Publication 3498-A, "The Examination Process (Audits by Mail)" (Rev. 5-2021). irs.gov
- IRS, Publication 5, "Your Appeal Rights and How to Prepare a Protest if You Disagree" (Rev. 4-2021). irs.gov
- IRS, Internal Revenue Manual 4.19.13.11.7, Taxpayer Requests Additional Time to Respond. irs.gov
- IRS, Publication 556, "Examination of Returns, Appeal Rights, and Claims for Refund" (Rev. 9-2013). irs.gov
IRSV.com is an independent guide and is not affiliated with the IRS. This page is general information, not tax or legal advice. Rules change; confirm details on IRS.gov or with a tax professional. Found an error? Tell us.