The LTR 950 serves the same function as the LTR 525: it's the IRS's preliminary determination after an audit, giving you 30 days to agree, partially agree, or protest to the IRS Office of Appeals. The LTR 950 is sometimes used for different examination types or IRS functions, but the legal effect is identical.
What's at Stake
This 30-day window is your gateway to Appeals. The Office of Appeals is where the best deals happen. Appeals Officers have settlement authority that auditors don't. They can consider the "hazards of litigation" and reach compromises that reflect the realistic chance of winning or losing in court.
If you miss this window, the IRS moves to the statutory notice of deficiency. At that point, your only option is Tax Court, which is more formal, more expensive, and takes longer. The 30-day letter is your best and cheapest opportunity to resolve a disputed audit.
Filing a Protest
For proposed increases of $25,000 or more, you need a formal written protest. It must include your name, address, and phone number, a statement that you want to appeal, the tax periods involved, a description of each adjustment you disagree with, the facts supporting your position for each adjustment, and the legal authority (IRC sections, regulations, court cases) supporting your position.
For proposed increases under $25,000, a small case request is sufficient. This is a brief letter stating which adjustments you disagree with and why.
The Strategy Decision
Not every audit adjustment is worth fighting. If the auditor correctly identified unreported income, agreeing saves you the cost and time of a protest. But if the auditor disallowed legitimate deductions because you didn't present the documentation effectively, or if they applied the law incorrectly, Appeals is where you fix it.
The decision to agree, partially agree, or protest should be based on the facts and the law, not on emotion. Review each proposed adjustment individually. Agree with what's correct. Fight what's wrong.
If you've received an LTR 950 and need help deciding whether to protest, call us at (813) 229-7100. We draft audit protests and represent taxpayers at Appeals regularly.