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.

Your 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.

How soon to act: High priority

What this notice means

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).

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 offers an opportunity to request administrative review before a Notice of Deficiency. Appeals officers review disputed findings independently; the result depends on the evidence and applicable law.

How it works

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

Other options

Consult a tax professional before responding — audit responses require precision and strategy
If you agree, sign Form 870 and arrange payment or a payment plan

If you do nothing

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

Which sounds like you?

IRS Appeals & CDP Hearings

Request an independent Appeals review of disputed findings

Audit Defense

Professional representation through the 30-day letter response process

U.S. Tax Court Representation

If Appeals fails, Tax Court is the next option

Penalty Abatement

Challenge any accuracy-related penalties proposed by the examiner

Common questions

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?

Appeals is an independent function within the IRS. Its officers review disputed issues and may consider litigation risks where permitted, without promising a change to the 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.