DIRECT ANSWER
What should you do after receiving IRS Letter 525?
IRS Letter 525 is generally issued after an examination when the IRS proposes changes to a tax return. The package commonly includes a report such as Form 4549 explaining the adjustments and generally provides 30 days to tell the IRS whether you agree or want to request an Appeals conference. Compare every proposed change with the filed return and audit record, follow the exact deadline and instructions printed on the letter, and send any protest or request to the IRS office that issued the letter rather than directly to Appeals.
Time-sensitive: current IRS Appeals and Taxpayer Advocate guidance generally describes a 30-day response period. Use the exact date and instructions printed on your Letter 525; do not assume an examiner discussion or website inquiry extends it.
Inventory the complete examination package
Keep Letter 525, the examination report, every schedule or explanation, agreement forms, publications, and the envelope or delivery record. Confirm the tax years, return forms, proposed adjustments, penalties, interest treatment, and printed response date.
Form 4549 or another examination report may summarize multiple issues. Recalculate each adjustment separately and trace it back to the filed return, the examiner's information request, documents already provided, and the examiner's explanation.
If you agree with the proposed changes
Review the computation and agreement language before signing. Confirm that the adjustments, payments, credits, penalties, and affected years match the resolution you intend to accept. Follow the letter instructions for signing, returning forms, and arranging payment when applicable.
Agreement with an examination report can have procedural and financial consequences. Do not sign merely to stop correspondence when an adjustment or calculation remains unclear.
If you disagree, build an issue-by-issue response
- List each disputed adjustment and the amount in question.
- State the relevant facts without adding unsupported conclusions.
- Cite the records, return schedules, and primary tax authority supporting the position.
- Explain why the examiner's facts or calculation are incomplete or incorrect.
- Separate factual disputes, legal interpretations, payment-posting errors, and penalty issues.
- Keep a complete copy and reliable delivery evidence for the response.
Follow the correct Appeals-request procedure
Current IRS guidance says to send an Appeals request to the office that issued the decision letter, not directly to the Independent Office of Appeals. The required format can depend on the amount in dispute, the taxpayer, the return, and the issues. Review the instructions included with Letter 525 and the current IRS protest guidance.
Do not assume that a brief statement is sufficient for every case. The IRS distinguishes small-case requests and formal written protests, and some entity cases do not qualify for the small-case procedure. A complete, accurate protest should address the facts, disputed issues, positions, and supporting authority required for the case.
Letter 525 is different from CP2000 and CP3219A
| Correspondence | General stage | Primary concern |
|---|---|---|
| CP2000 | Automated information-matching proposal rather than an examination report. | Reconcile third-party forms with the filed return and respond by the printed date. |
| Letter 525 | Proposed changes after an IRS examination, generally with an opportunity to request Appeals review. | Analyze each audit adjustment and follow the printed agreement or protest instructions. |
| CP3219A | Statutory notice of deficiency stating a non-extendable Tax Court petition date. | Protect the printed petition deadline while evaluating IRS resolution and legal options. |
Letter 525 response checklist
- The complete Letter 525, all enclosures, and delivery information
- Form 4549 or other examination report and every adjustment schedule
- The filed return, amendments, elections, and proof of filing
- Every Information Document Request and the records previously supplied
- Examiner emails, letters, meeting notes, and issue explanations
- Source documents and workpapers supporting each disputed item
- Payment, credit, withholding, and estimated-tax records
- A draft issue-by-issue agreement or protest schedule
When CPA or legal help may be useful
A professional review can help organize the facts and calculations, but it cannot guarantee an IRS decision, penalty result, payment arrangement, appeal outcome, or litigation result. Depending on the agreed scope, support may include:
- Recalculate each proposed adjustment and trace it to the filed return
- Organize the facts, records, and tax authority for each disputed issue
- Prepare accounting workpapers and a response or protest package
- Communicate with the examiner or Appeals when authorized and included in the engagement
- Coordinate with a tax attorney when legal advice, privilege, litigation, or Tax Court rights require counsel
Avoid these common response risks
- Do not send an Appeals request directly to Appeals when the letter instructs you to use the issuing office.
- Do not sign an examination agreement without understanding the proposed changes.
- Do not assume an examiner conversation or additional document submission extends the printed response date.
- Do not use the website contact form to send tax returns, audit reports, Social Security numbers, bank records, or transcripts.
General-information disclaimer
This guide provides general information and does not constitute tax or legal advice. IRS correspondence and available options depend on the notice, tax period, procedural stage, individual facts, and current law. A website inquiry does not create a CPA-client relationship.
For an approaching deadline, use the IRS contact information printed on the notice or seek qualified professional help immediately. Do not wait for a website response.
ABOUT THE AUTHOR
Stefano Tavella, CPA
Stefano Tavella, CPA leads Tavella CPA Group, a cloud-based CPA firm serving individuals and small businesses with tax preparation, planning, notice assistance, and related services.
Official sources
Check the current IRS page and the instructions printed on the actual notice before acting.
- IRS Appeals: Letters and notices offering an appeal opportunity
- IRS Appeals: Preparing a request for Appeals
- IRS: Forms and publications about your appeal rights
- IRS Publication 556: Examination of Returns, Appeal Rights, and Claims for Refund
- Taxpayer Advocate Service: Letter 525
- IRS: Audits
Source review completed July 24, 2026.