From IRS Audit to Appeal - Navigating Your Response to IRS Letter 915

Decoding IRS Letter 915: A Step-by-Step Guide for Taxpayers 

The sight of an envelope from the Internal Revenue Service (IRS) can cause a wave of anxiety for any taxpayer. When that envelope contains a notice like Letter 915, it’s easy to assume the worst. However, understanding what this letter means and the options available to you is the first step toward resolving the issue calmly and effectively.  

What Is IRS Letter 915? 

IRS Letter 915, officially titled “Examination Report Transmittal,” is a crucial piece of correspondence that you receive after an in-person IRS audit of your tax return results in proposed adjustments. It is commonly known as a “30-day letter” because it gives you 30 days to respond to the IRS’ findings. It’s important to note that this is not a bill; rather, it is a proposal of changes to your tax liability. 

This letter is distinct from Letter 525, which serves a similar purpose but is issued for audits conducted by mail. If you’ve met with an IRS examiner in person, you will receive Letter 915. 

Deconstructing the Letter 915 Package 

Letter 915 does not arrive alone. It serves as a cover letter for a package of documents, most notably Form 4549, Report of Income Tax Examination Changes. This report is the heart of the notice and details the examiner’s proposed adjustments. It provides a line-by-line explanation of the changes, the corrected tax liability, and any resulting penalties or interest. 

Under Internal Revenue Code (IRC) § 7522, any notice of proposed deficiency that allows for an administrative review must describe the basis for the proposed changes and identify the specific amounts of tax, interest, and penalties. Letter 915 and its accompanying report are designed to fulfill this requirement, giving you a clear picture of why the IRS believes your tax return needs to be adjusted. 

Your Three Main Options After Receiving Letter 915 

Upon receiving Letter 915, you have a critical 30-day window to decide on a course of action. There are three primary paths you can take, each with significant consequences. 

Agree: Sign and return the enclosed agreement form (Form 4549 or Form 870). You waive your appeal rights. The IRS will assess the tax and send a bill. Interest accumulation may be limited. 

Disagree: Do not sign the agreement. Request an informal conference with the examiner’s manager or file a formal protest to appeal the decision. You preserve your right to challenge the findings with the IRS Independent Office of Appeals. 

Do Nothing: Do not respond within the 30-day period. The IRS will issue a Statutory Notice of Deficiency (“90-day letter”), giving you 90 days to petition the U.S. Tax Court. 

The Path of Disagreement: How to Appeal an IRS Decision 

If you disagree with the findings in Letter 915, you have the right to appeal the decision within the IRS. This process is a cornerstone of the Taxpayer Bill of Rights, which ensures your right to a fair and impartial administrative appeal. 

Your first step can be to request an informal conference with the examiner’s supervisor to discuss the case. If this does not lead to a resolution, you must file a written request for an official appeal. The type of request you must file depends on the total amount of proposed changes for each tax period. 

Small Case Request 

If the total amount of proposed tax and penalties for any given tax period is $25,000 or less, you can make a Small Case Request. This is a simplified process that does not require a formal, detailed protest. You can either: 

•Prepare a brief written statement outlining the disputed issues and your reasons for disagreeing. 

•Complete and submit Form 12203, Request for Appeals Review. 

Formal Written Protest 

A Formal Written Protest is required if the total proposed tax and penalties for any tax period exceed $25,000. It is also mandatory for all cases involving partnerships, S corporations, or employee plans and exempt organizations. 

According to IRS Publication 5, a formal protest must include the following elements: 

1.Your Information: Your name, address, and a daytime telephone number. 

2.Statement of Intent: A declaration that you want to appeal the IRS findings to the Independent Office of Appeals. 

3.Copy of the Letter: A copy of Letter 915. 

4.Disputed Issues: A list of the tax periods involved and the specific adjustments you disagree with. 

5.Supporting Facts: A detailed statement of the facts supporting your position for each disputed issue. 

6.Supporting Law: An explanation of the law or authority you are relying on. 

7.Penalties of Perjury Statement: You must sign a statement declaring that the information provided is, to the best of your knowledge, true, correct, and complete. 

It is crucial to submit this protest to the address specified in Letter 915 before the 30-day deadline expires. 

What Happens If You Don’t Respond? 

Ignoring Letter 915 is a choice with significant repercussions. If you fail to respond within the 30-day period, the IRS will close the case at the examination level and issue a Statutory Notice of Deficiency, also known as a “90-day letter.” This is a legally significant document that gives you 90 days to file a petition with the U.S. Tax Court. If you do not petition the court within that timeframe, the IRS will assess the proposed tax liability, and the collection process will begin. 

Furthermore, if you do not respond to the 30-day letter, you may lose the opportunity to have your case heard by the IRS Independent Office of Appeals, a forum designed to resolve disputes without costly and time-consuming litigation. 

Conclusion 

Receiving IRS Letter 915 marks a critical juncture in your journey through the IRS examination process. It is not a final judgment but an opportunity for you to engage with the IRS, understand their position, and advocate for your own. Whether you agree, disagree, or need more time to consider your options, taking deliberate, informed action within the 30-day window is paramount. Consulting with a qualified tax professional can provide invaluable guidance in navigating this complex process and ensuring your rights as a taxpayer are protected. 

For an even deeper dive, download the QR Code on the screen or click the button to watch the free, in-depth video, “The Ultimate Guide to Solving Your IRS Tax Problems.” You’ll find more in-depth explanations of complex tax topics and practical advice for managing your IRS tax obligations. 

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