IRS Notices

IRS Letter 692: How to Appeal Audit Results (2025)

By Angeline Balsitis, EA · Reviewed by Melissa Ly, Chief Tax Officer · Updated October 7, 2025 · Editorial Standards

Why you got Letter 692 from the IRS

If you're searching "letter 692 irs," you've likely just been through an examination — an audit of one or more tax years. Letter 692 is how the IRS shares its proposed results and asks you to consider them. Attached to it (or sent with it) you'll find an examination report, usually Form 4549, that lists every change the IRS wants to make and the new tax, penalties, and interest those changes would create.

This letter is a turning point, not a final bill. The IRS is saying: "Here's what we found. Do you agree, or do you want to push back?" You still have room to negotiate, submit missing records, or take the case to an independent reviewer. That room shrinks once the next letter arrives — so the date on Letter 692 matters.

You can read the IRS's own overview of the process on the IRS audits page.

What Letter 692 actually says

Letter 692 generally gives you three paths:

• Agree — sign and return the examination report. This closes the audit, and you'll get a bill for the additional tax.
• Disagree with proof — send documents that support your original return, like receipts, bank records, or mileage logs the auditor didn't have.
• Request Appeals — ask for a conference with the IRS Independent Office of Appeals, a separate office that reviews the case fresh.

You don't have to pick blindly. The smartest move is often to look at which changes you can support with evidence and which you can't — then respond only where you have a real argument.

What happens if you ignore Letter 692

The audit process is automated past a certain point. Miss the window on Letter 692, and the IRS doesn't drop the case — it escalates to letters with hard legal deadlines:

1. Letter 692 — request to consider audit findings. You are here. Flexible options are still open.
2. Notice of Deficiency (CP3219A or Letter 531) — the "90-day letter." This starts a strict 90-day clock to petition U.S. Tax Court. Miss it and the proposed tax becomes final.
3. Assessment & billing — once the deficiency is assessed, the IRS sends a bill and the collection notices begin (CP14, then reminders).
4. Collection enforcement — if the new balance goes unpaid, the standard sequence follows: liens, then Notice of Intent to Levy, then wage garnishment and bank levies.

The takeaway: every step after Letter 692 is harder and costs you options. The cheapest, easiest place to fix an audit result is right where you are now.

How to appeal your audit results after Letter 692

If you disagree with the findings, you have a real right to appeal. The IRS Independent Office of Appeals is separate from the auditor who examined your return. Its job is to look at the case impartially and weigh the "hazards of litigation" — meaning how the case would likely play out if it went to court. That often opens room to settle a disputed issue.

To request Appeals, you respond in writing. For proposed changes, you can use Form 12203, Request for Appeals Review (commonly used when the disputed amount is $25,000 or less for a tax period). For larger disputes, you'll generally need a formal written protest that explains, issue by issue, why you disagree and what the law and facts support. The IRS explains both routes on its Appeals overview page.

A worked example helps. Say the audit disallowed $18,000 in business expenses because you couldn't find the receipts during the exam. After the letter arrives, you locate bank statements and vendor invoices for $12,000 of it. You don't have to fight all $18,000 — you respond with proof for the $12,000 you can document and concede the rest. That focused response is exactly the kind of thing Appeals can resolve.

How to respond to Letter 692, step by step

1. Read the examination report line by line. Find each change the IRS made and the dollar amount tied to it. Note which ones you can support with records and which you can't.
2. Check the deadline. Mark the response date — usually 15 days from the letter date — on your calendar. If you need more time, call the contact number on the letter before that date.
3. Gather your proof. Pull bank statements, receipts, invoices, logs, or corrected figures for the issues you plan to dispute. Organize them by item.
4. Decide your path. Agree and sign, disagree with documentation, or request an Appeals conference using Form 12203 or a written protest.
5. Send everything trackable. Mail your response with proof of delivery, and keep a complete copy of what you sent.
6. Get a professional review if the stakes are high. If the proposed tax is large, involves penalties, or spans multiple years, have an experienced tax professional review the report before you respond — the order you address the issues changes the outcome.

One more option worth knowing: if you've already missed every deadline and the audit closed against you, you may still be able to reopen it through IRS audit reconsideration, especially if you have records the IRS never saw. And if you're unsure how far back the IRS can reach, our guide on how far back the IRS can audit explains the time limits.

Letter 692 questions, answered

This guide is general information, not tax or legal advice for your specific situation. Eligibility for IRS programs depends on individual facts and circumstances; no outcome is guaranteed. If you need help with a deadline, the Taxpayer Advocate Service is a free, independent IRS resource.

Related: read about the CP3219A Notice of Deficiency that often follows, the 90-day letter and Tax Court petition basics, or browse all guides.