Received an IRS audit letter? No need to panic. Here’s all you need to know about the different types of IRS audit letters.
In this article:
- Notice of Audit and Examination Scheduled
- IRS Letter 531
- IRS CP2000
- IRS Letter 950
- IRS Letter 525
- IRS Letter 692
- IRS Letter 915
- IRS Letter 3391
- IRS CP2501
- IRS Letter 2205-A
- IRS CP22E
- IRS Letter 2625C/2526C
- IRS Letter 3219
IRS Audit Letter | 13 Types You Should Know About
Before we discuss what each specific IRS audit letter means, let’s look into the four types of a tax audit. They are as follows:
- Correspondence Audit. This is the simplest kind of audit, which primarily entails submitting additional tax documents to the IRS to substantiate claims made on tax returns.
- Office Audit. This audit requires a taxpayer to pay a visit to an IRS office.
- Field Audit. Here IRS representatives pay a taxpayer’s home or place of business a visit for the purpose of examining records related to their tax returns.
- Taxpayer Compliance Measurement Program (TCMP) Audit. This is a comprehensive audit that relies on data from a large number of existing tax returns to determine the veracity of the tax return being audited.
Regardless of what kind of audit the IRS will choose when pursuing your case, the process will most likely begin with sending out any of these letters.
1. Notice of Audit and Examination Scheduled
This is the standard notice received by a taxpayer scheduled for a tax audit. With this letter, the taxpayer is informed about the agency’s intent to conduct an audit and under what terms.
This letter must not be ignored. The response can be in the form of either a phone call or a letter.
Should you decide to send the IRS an audit response letter, it should contain pertinent details, such as the following:
- Tax ID number
- Full name
- Employee or business ID
- Contact information
Also, make sure to address the tax issues raised in the letter. It is best to provide relevant documentation to support your claims.
Taxpayer response should be made within 30 days after receipt of the notice. Otherwise, the IRS might give you a penalty.
2. IRS Letter 531
This is called Notice of Deficiency. Basically, this letter informs you of a tax deficit.
IRS Letter 531 includes the specifics of the tax deficit, such as the year/s from which you owe, and the additional amount you need to pay the IRS. Here you have two options.
You can either pay the tax deficit or refute the new computation. Should you decide on the latter, you must file a tax court petition within 90 days of receiving the notice.
A Notice of Deficiency contains instructions on how a taxpayer can dispute their adjusted tax returns.
3. IRS CP2000
This is called Automatic Adjustment Notice, one of the most common automated adjustment letters sent by the IRS. The tax adjustments specified in these letters are the result of tax records from third parties, which the IRS compared to your submitted documents.
The CP2000 Notice will clearly identify the agency’s proposed changes on your tax return. Once again, you have two ways to respond.
The first is by agreeing to the adjustments and paying any additional tax due in full. The second is by contesting the adjustments via a phone call or an audit response letter.
The latter must be accomplished within 60 days upon receipt of the notice.
4. IRS Letter 950
This is called 30 Day Letter Straight Deficiency or Over Assessment. As the name suggests, this can either be detrimental or beneficial to a taxpayer.
It is detrimental in the case of straight deficiency and beneficial in the case of over-assessment. Either way, you must respond to this letter promptly.
Should you agree to the contents of the letter, the response is as easy as signing the notice and sending it back to the IRS. Conversely, a protest or petition should be filed within 30 days upon receipt of the letter.
IRS Letter 950 is usually sent after a field audit.
5. IRS Letter 525
This is called General 30 Day Letter. Here the IRS sends a taxpayer a proposed adjustment on their tax return.
The reasons for these adjustments are varied. It may be that computation errors were made while assessing your return or the IRS saw faulty details in it.
If you agree with the proposed adjustments, you can sign the letter and mail it back to the IRS. Otherwise, you have 30 days to file an official appeal with the IRS office that sent the letter.
6. IRS Letter 692
This is called Request for Considering of Additional Findings. This letter comes with a detailed report on the tax adjustments made by the IRS on your return.
If you consider the adjustments valid, sign the letter and send it back to the IRS. If you think there’s a winnable case of over-assessment, you can appeal the adjustments by corresponding with the IRS office that sent the letter.
Unlike the other letters in this list, however, this one allows taxpayers only 15 days to make an appeal. Hence, if that’s the route you deem most beneficial on your end, you must respond as promptly as possible.
RELATED: What Is The IRS Tax Audit Process
7. IRS Letter 915
This is called Letter to Transmit Examination Report. This is another type of official IRS notice that zeroes in on tax return adjustments.
Again, a taxpayer has two ways to respond. Either sign the agreement or appeal the adjustments within 30 days of receipt of the notice.
8. IRS Letter 3391
This is called the 30 Day Nonfiler Letter. This notice is sent to delinquent taxpayers suspected of neglecting to file their tax returns.
Letter 3391 details the tax liability that must be paid to satisfy dues from unfiled returns. Should you agree to the specified amount, you can sign the letter and mail it back to the IRS.
Meanwhile, a planned appeal should be filed within 30 days after receiving the letter.
9. IRS CP2501
This is called Notice of Initial Contact, which is similar to the IRS CP2000. But instead of specifying adjustments made on a tax return, here the IRS seeks clarification from a taxpayer.
What the IRS hopes to clarify are alleged discrepancies from a submitted tax return as compared to records from third party sources. In this case, the best recourse is to request a copy of your tax return by filling out IRS Form 4506-T.
Doing so will let you in on all the information the IRS has associated with your social security number. This will help you assess where the alleged discrepancies occurred.
10. IRS Letter 2205-A
This letter informs a taxpayer that their return is being audited. It also includes details of the audit, such as the name and contact information of the IRS agent assigned with the task.
Typically, in these cases, only specific portions of a tax return are examined. However, it is quite possible for an IRS auditor to decide to pursue a comprehensive tax return examination should they deem it necessary.
11. IRS CP22E
This is called Examination Adjustment Notice. This is the direct result of a completed correspondence or field audit, sent to taxpayers to inform them of their tax due post audit.
Taxpayers are expected to respond to this notice within 30 days.
12. IRS Letter 2625C/2526C
This is another 30-day notice from the IRS. It specifies a tax balance and details response options a taxpayer could make (agree vs appeal).
13. IRS Letter 3219
This is similar to IRS Letter 531 as it’s also a Notice of Deficiency. This is sent if the taxpayer has failed to respond to their 30-day notice.
If you do not agree with the tax balance stated in this letter, you must file an appeal with the tax court within 90 days. Additional 60 days are given to citizens living outside the United States.
This letter is an escalated form of IRS notice. In this case, it is best to consult with a tax professional.
Receiving IRS audit letters is not always a bad thing, as long as you are prepared with relevant records. In fact, it can even mean a tax refund.
So next time you see an IRS notice in the mail, do not panic and instead refer to this article so you would know what it’s about.
Have you been audited before? Tell us about your experience in the comments section below.
If you owe back taxes, visit taxreliefcenter.org for more information on tax relief options.
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