Receiving correspondence from the IRS can be a stressful experience for any taxpayer. One such notice, IRS Letter 5248, is of particular importance due to its implications regarding unreported income and participation in the Expedited Appeals Process (RAP).
What is IRS Letter 5248?
IRS Letter 5248 is a preliminary notification informing taxpayers that the IRS has identified discrepancies in reported income, often based on information returns (such as Forms 1099, W-2, etc.) submitted by third parties. The letter is not a bill, but it serves as an early alert that the IRS believes there may be underreported or omitted income on your tax return.
This letter typically comes from the IRS’s Automated Underreporter Program (AUR) and indicates that further action may follow, including formal audits or assessments, if the issues are not resolved promptly.
Purpose of Letter 5248
The primary purpose of Letter 5248 is to offer the taxpayer an opportunity to address income discrepancies proactively before the IRS moves to more aggressive enforcement measures. It aims to resolve potential tax disputes early and efficiently, helping to avoid penalties, interest, and extended examination procedures.
The letter invites taxpayers to participate in the Rapid Appeals Process (RAP) — a streamlined alternative to the standard appeals process.
What is the Expedited Appeals Process (RAP)?
The RAP, or Rapid Appeals Process, is a voluntary and accelerated resolution program offered by the IRS to resolve specific audit disputes before a formal assessment is made. RAP is designed to promote early resolution of cases, reduce burden on both parties, and prevent unnecessary litigation.
Participation in RAP through Letter 5248 allows taxpayers to bypass traditional appeals timelines and settle the dispute informally with an Appeals Officer. However, acceptance into RAP is not guaranteed — the taxpayer must meet eligibility criteria and submit the required documentation on time.
Associated Documentation: Form 14525
To initiate the RAP process, taxpayers must complete and return Form 14525 – RAP Participation Request. This form formally expresses your intent to resolve the dispute through RAP and should be submitted within the deadline indicated on Letter 5248.
Key details typically required include:
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- Summary of the disputed issues
- Taxpayer contact information
- Authorization of a representative, if applicable
Failure to submit this form timely may result in the IRS proceeding with a Notice of Deficiency, triggering formal appeal rights and potential litigation.
Recommended Actions
If you receive IRS Letter 5248, we recommend the following actions:
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- Do not ignore the letter. Timely response is critical.
- Review your tax return and compare it with third-party information (e.g., income forms).
- Consult a tax attorney or CPA to help determine the validity of the IRS’s findings.
- Consider participation in RAP by submitting Form 14525, if eligible.
- Maintain documentation and correspondence records to support your case.
Relevance for Taxpayers
IRS Letter 5248 signals a serious tax compliance issue that may result in additional tax liability, penalties, and interest. However, it also presents an opportunity: through the RAP, taxpayers can resolve disputes early without engaging in costly and prolonged litigation. Whether you’re a business owner, self-employed individual, or wage earner, timely and informed action can significantly impact the outcome.
We Can Help!
At JH TAX LAW, we understand the complexity and stress associated with receiving IRS notices. We work diligently to protect your rights, minimize liabilities, and achieve favorable resolutions. Contact our office to schedule a confidential consultation today.