IRS Letter 525
General 30-Day Letter — Proposed Audit Adjustments
Your audit examination is complete. You have 30 days to agree, appeal, or request reconsideration.
Deadline
30 days to respond, agree, or request an Appeals conference
If you do not respond within 30 days, the IRS will issue a Notice of Deficiency (Letter 531 — 90-Day Letter), which is the final step before Tax Court.
Respond promptly to protect your options and avoid escalation.
Letter 525, the 30-Day Audit Letter, follows an IRS examination and proposes additional tax. The taxpayer has 30 days to file a protest and request a hearing with the independent IRS Appeals Office, or the case will escalate to a Statutory Notice of Deficiency (90-Day Letter).
What IRS Letter 525 Means
Letter 525 is the IRS's 30-Day Letter — the formal conclusion of an audit examination with specific proposed adjustments. The examiner has completed their review and is proposing to change your tax return in specific ways, resulting in additional tax, penalties, and interest.
This letter gives you 30 days to choose one of three paths: (1) agree with all proposed changes and sign the agreement form, (2) partially agree and dispute specific items, or (3) disagree with all proposed changes and request a conference with the IRS Office of Appeals.
Letter 525 is your last chance for internal administrative resolution before the IRS issues a Notice of Deficiency (the 90-Day Letter). The Appeals route is powerful — Appeals Officers are independent and often settle cases on terms more favorable than the examiner's proposal.
What the IRS Can Do If You Don't Respond
- Issue a Notice of Deficiency (Letter 531) after 30 days if you don't respond
- Assess the full proposed deficiency plus penalties after the 90-day Tax Court window expires
- Charge accuracy-related penalties of 20% on the underpayment
- Add interest from the original due date of the return
What You Should Do Right Now
- 1
Review every proposed adjustment against your actual documentation
- 2
Do not simply agree to adjustments that are incorrect — disagreement is your right
- 3
File a written protest with the IRS Office of Appeals within 30 days if you disagree
- 4
Consult a tax professional before responding — audit responses require precision and strategy
- 5
If you agree, sign Form 870 and arrange payment or a payment plan
Resolution Options Available to You
Request an Appeals conference — over 85% of cases settle here
Professional representation through the 30-day letter response process
If Appeals fails, Tax Court is the next option
Challenge any accuracy-related penalties proposed by the examiner
Frequently Asked Questions About IRS Letter 525
Should I just agree to the audit adjustments in Letter 525?
Only if they are correct. Many audit adjustments contain errors or miss deductions that were legitimately allowable. Always review the proposed changes carefully with a professional before agreeing.
What is the IRS Office of Appeals?
The Appeals Office is an independent function within the IRS. Appeals Officers are not the same as examiners — they evaluate cases based on hazards of litigation and often settle on terms more favorable than the original audit position.
Does requesting Appeals extend my time to respond?
Filing a written protest and requesting an Appeals conference within the 30-day window extends the process — the IRS will not issue the 90-Day Letter while an Appeals conference is pending.
Professional References
IRC: IRC §6212 — Notice of Deficiency; IRC §7123 — Appeals Dispute Resolution
IRM: IRM 4.8 — Examination of Returns — Closing Procedures
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