IRS Letter 915 Explained
Understanding IRS Letter 915 and Your Response Options
IRS Letter 915 is an examination letter that may accompany proposed adjustments resulting from an IRS audit. Depending on the type of examination and the taxpayer involved, the letter generally explains the proposed changes, provides supporting examination documents, and outlines the taxpayer's available response options.
Receiving Letter 915 does not necessarily mean the IRS's proposed adjustments are final. Taxpayers typically have an opportunity to review the examination findings, determine whether they agree with the proposed changes, submit additional information when appropriate, or pursue available administrative review procedures.
This guide explains what IRS Letter 915 generally means, what documents often accompany the letter, how to evaluate the proposed adjustments, and what response options may be available before the examination proceeds further.
Key Takeaways
- Letter 915 is issued in connection with certain IRS examinations.
- It commonly accompanies proposed examination adjustments.
- The enclosed examination report is often the most important document to review.
- Taxpayers may have an opportunity to agree, partially agree, or disagree with the proposed changes.
- Prompt review of the response deadline is important.
What Is IRS Letter 915?
Letter 915 is an IRS examination letter used in certain audit situations to transmit proposed examination results and explain the taxpayer's available response procedures. The exact contents of the letter may vary depending on the examination program, the taxpayer, and the issues involved.
The letter often accompanies an examination report showing the proposed changes to taxable income, deductions, credits, penalties, or other items reviewed during the audit. Reviewing both the letter and every enclosed document is essential before deciding how to respond.
Letter 915 generally represents an administrative stage of the examination process rather than the final assessment of tax. Depending on the circumstances, additional administrative review may still be available before the IRS issues a statutory Notice of Deficiency.
Why Did You Receive Letter 915?
Generally, Letter 915 means the IRS examination has progressed to the point where proposed adjustments have been prepared. The examiner believes one or more items reported on the return should be changed based on the audit findings.
Income Adjustments
The IRS may conclude that taxable income was understated or omitted.
Deduction Changes
The examiner may disallow deductions because supporting documentation was insufficient or legal requirements were not satisfied.
Credit Adjustments
Refundable or nonrefundable credits may be adjusted based on the audit findings.
Business Issues
Business expenses, depreciation, accounting methods, basis calculations, and similar issues may result in proposed adjustments.
Letter 915 Generally Is Not the Final Step
Although Letter 915 communicates proposed examination findings, taxpayers may still have procedural options available. Depending on the circumstances, those options may include agreeing with the proposed changes, providing additional information, requesting administrative review, or pursuing other procedures described in the letter.
For that reason, taxpayers should carefully review every enclosure before signing agreements or allowing response deadlines to expire.
How to Review IRS Letter 915
Before responding to Letter 915, carefully review every document enclosed with the letter. The examination report, schedules, and explanatory statements generally contain the detailed reasons for each proposed adjustment. Many taxpayers focus only on the amount of additional tax proposed rather than understanding why the IRS believes the adjustment is appropriate.
The most effective responses address each adjustment individually. Review the supporting facts, compare the examiner's conclusions with your records, and determine whether the proposed changes accurately reflect the applicable tax law.
Six Steps for Evaluating Letter 915
Review Every Enclosure
The examination report, schedules, explanations, and computational worksheets often provide far more information than the cover letter itself.
Review Each Proposed Adjustment
Determine exactly what income, deductions, credits, depreciation, basis, or other tax items were changed.
Compare the Findings to Your Records
Review your accounting records, tax return, receipts, brokerage statements, depreciation schedules, and other documentation supporting the reported tax treatment.
Identify Areas of Agreement
Some proposed adjustments may be appropriate while others deserve additional review. Evaluate each issue independently.
Organize Supporting Documentation
Arrange documents so they correspond directly with each adjustment rather than submitting large volumes of unorganized records.
Determine the Appropriate Response
Based on your review, determine whether agreeing, partially agreeing, requesting Appeals review, or otherwise responding under the procedures described in the letter is appropriate.
General Response Options
| Situation | Possible Response |
|---|---|
| You agree with every adjustment. | Review the agreement documents carefully before signing and follow the instructions provided in the letter. |
| You agree with some adjustments. | Identify the issues accepted and separately explain the issues remaining in dispute. |
| You disagree with the examination findings. | Prepare a written explanation supported by facts, documentation, and applicable tax authority where appropriate. |
Documents Commonly Reviewed
Review the original return together with any amended returns filed.
Understand each proposed adjustment and how the IRS calculated it.
General ledgers, journals, depreciation schedules, and financial statements may all be relevant.
Receipts, contracts, brokerage statements, settlement statements, mileage logs, and other documentation may support the taxpayer's position.
Review the Response Deadline Carefully
Letter 915 generally provides instructions regarding the time available to respond. Review the letter immediately, calendar the applicable deadline, and avoid waiting until the final days to begin preparing your response.
Retain complete copies of your response, supporting documentation, and proof showing when and how the materials were submitted to the IRS.
What Happens After IRS Letter 915?
After you respond to Letter 915, the IRS will evaluate the information submitted and determine whether the proposed examination adjustments should be modified, withdrawn, or maintained. The amount of time required varies depending upon the complexity of the issues and the IRS office handling the examination.
If your response resolves the disputed issues, the examination may conclude without further action. If disagreements remain, the case may continue through the IRS administrative process, including referral to the Independent Office of Appeals when appropriate or, if no administrative resolution is reached, issuance of a statutory Notice of Deficiency.
Possible Outcomes
- The IRS accepts your position and withdraws the proposed adjustment.
- The IRS modifies part of the proposed examination changes.
- The matter proceeds through additional administrative review.
- The IRS issues additional examination correspondence if the dispute remains unresolved.
Typical Examination Timeline
Although every examination is different, Letter 915 generally appears toward the end of the examination process after the IRS has completed its review of the return and supporting documentation.
Practical Considerations
Many taxpayers concentrate on the amount of additional tax proposed rather than the individual adjustments creating that amount. A careful review of each adjustment often produces a much clearer understanding of the examination issues.
Well-organized documentation is generally more persuasive than submitting hundreds of pages of unrelated records. The objective is to connect each document directly to the adjustment being disputed.
When multiple issues are involved, consider each adjustment separately. Some adjustments may be appropriate while others warrant further review or administrative appeal.
Common Mistakes After Receiving Letter 915
Ignoring the Deadline
Waiting too long may reduce available administrative options.
Reviewing Only the Cover Letter
The examination report and schedules usually explain the IRS's reasoning in much greater detail.
Submitting Unorganized Records
Supporting documents should correspond directly to each adjustment under review.
Assuming Every Adjustment Is Wrong
Evaluate each issue independently rather than treating the entire examination report as incorrect.
Failing to Explain the Facts
Documentation is most persuasive when accompanied by a clear explanation of why it supports the taxpayer's position.
Not Keeping Copies
Maintain complete copies of everything submitted together with proof of delivery.
Frequently Asked Questions
Is Letter 915 a final assessment?
Generally, no. Letter 915 usually communicates proposed examination findings before the examination process is fully completed.
Can I disagree with the IRS?
Yes. Depending upon the procedures described in the letter, taxpayers may submit additional information or pursue available administrative review options.
Should I review the examination report?
Absolutely. The examination report typically contains the detailed explanation supporting the IRS's proposed adjustments.
Can additional documentation be submitted?
Yes. Supporting documentation often helps clarify factual issues or explain why a proposed adjustment should be modified.
What happens if I do nothing?
If no response is received, the examination generally continues under normal IRS procedures and additional correspondence may follow.
Should I keep copies of everything?
Yes. Maintain copies of your response, supporting documents, correspondence, and proof showing when the materials were submitted.
Received IRS Letter 915?
Letter 915 often represents an important stage in the IRS examination process. Understanding the proposed adjustments, reviewing the examination report carefully, and responding appropriately may significantly affect the outcome of your case.
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