Letter 525: General 30-Day Letter

The Letter 525, also known as a General 30-Day Letter, is sent by the IRS to inform taxpayers that the IRS has proposed changes to their tax return. The letter provides the taxpayer with 30 days to either accept the changes or file an appeal.

Key aspects of Letter 525:

• Proposed Changes: The letter outlines the proposed changes to the taxpayer’s return, including adjustments to income, deductions, or credits. These changes could result in additional taxes owed or a reduced refund.
• 30-Day Response Window: Taxpayers have 30 days from the date of the letter to respond. They can either agree with the proposed changes and pay the amount due or file an appeal if they believe the changes are incorrect.
• How to Dispute the Changes: If the taxpayer disagrees with the proposed changes, the letter provides instructions for filing an appeal. Taxpayers will need to provide documentation to support their original return during the appeal process.
• Consequences of Non-Response: If the taxpayer does not respond within 30 days, the IRS will finalize the changes and assess any additional taxes owed, including penalties and interest.

Letter 525 is an important notice for taxpayers who need to review the IRS’s proposed adjustments to their return and decide whether to accept or challenge the changes.