How do I know if my IRS letter is an audit or a collection notice?

Read what the letter asks for. Letter 525 and the other examination letters question items on a return and ask for records or agreement. A CP2000 proposes changes from third-party forms through the document-matching program, and the IRS treats it as a proposal rather than an examination. A collection notice such as CP14, CP504, or LT11 states an assessed balance and asks for payment. The code printed in the corner identifies the letter, and irs.gov publishes an explanation page for the common notice codes.

Can an IRS audit turn into a collection case?

Yes, and it routinely does. When the examination ends in an assessment and the balance goes unpaid, the file moves from the examination function to the collection function. The letters change from proposed adjustments to bills and levy warnings. From there the dispute shifts from whether the amount is right to how it will be collected through liens, levies, and payment arrangements. The amount itself is easiest to contest while the examination is still open.

What does this firm charge for an audit or a collection case?

An initial consultation is a call with Mr. Powell, and there is no charge for the call. The firm reviews the notice and the posture of the case, then quotes the fee in writing for the specific engagement before any work begins. Government fees are separate and are set by the agency. A United States Tax Court petition carries a $60 filing fee, and an offer in compromise carries a $205 application fee. The response date printed on the letter controls regardless of who answers it.

Procedure comparison · Washington, DC office

IRS audit vs collection case

An audit, which the IRS calls an examination, questions items on a filed return and proposes a change to the tax. A collection case enforces a balance the IRS has already assessed. Examination mail includes Letter 525 and, from the document-matching program, CP2000, which proposes changes from third-party forms rather than opening an examination. Both routes can end in agreement, an Appeals protest, or a Tax Court petition. Collection mail starts with a bill such as CP14 and runs through CP504 to LT11, and it resolves through a payment plan, an offer in compromise, hardship status, or a hearing. The code printed on the letter and what the letter asks for identify which case is open. The Law Office of Alexander Powell, PLLC in Washington, DC handles both.

Deadlines and fees below were verified against uscode.house.gov, ustaxcourt.gov, and irs.gov on August 18 and 19, 2026. The letter in hand controls over this summary.

Start here Call (202) 821-1980

Side by side

What is the difference between an IRS audit and a collection case?

An audit, which the IRS calls an examination, questions items on a filed return and proposes a change to the tax. A collection case enforces a balance the IRS has already assessed.

Statutory deadlines and government fees as of August 19, 2026, from the official sources linked below.
Question	Examination (audit)	Collection case
What triggers it	The IRS selects a return for review, or the document-matching program finds income on third-party forms that the return does not show.	A tax is assessed, by your own filing, by an agreed exam, or by default after an unprotested one, and the balance goes unpaid.
What the letters look like	Examination letters: CP2000 for changes proposed by document matching, Letter 525 for the examination report, Letter 3219 for the Notice of Deficiency that opens the Tax Court window.	Collection notices: CP14 for the first bill, CP504 for the intent-to-levy warning, LT11 or Letter 1058 for the final notice carrying hearing rights, Letter 3172 when a lien is filed.
What the IRS wants	Records that support what the return reports, such as receipts, bank statements, and written explanations, or an agreement to the proposed change.	Full payment, or a payment path the IRS will accept, supported by a financial statement where the program calls for one.
The deadline that matters	Each letter prints its own response date. The statutory deadline is 90 days from a Notice of Deficiency, or 150 days if the notice is addressed to a person outside the United States, to petition the U.S. Tax Court under 26 U.S.C. section 6213(a).	Each notice prints its own response date. The statutory deadline is 30 days from LT11, Letter 1058, or a lien notice to request a Collection Due Process hearing that preserves Tax Court review.
The relief paths	Substantiation, an amended position, an Appeals protest, audit reconsideration in narrow cases, and a Tax Court petition, which carries a $60 filing fee per the court's fee schedule checked August 19, 2026.	Payment plans, an offer in compromise, currently not collectible status, penalty abatement, and a Collection Due Process or equivalent hearing.
What the representative does	Answers the information document requests, assembles the substantiation, and writes the examination response, which becomes the record Appeals or the Tax Court reads later.	Calendars the hearing deadline, files the hearing request, prepares the financial statement, and negotiates the payment path with the collection function.

Deadlines and fees change. The letter in hand and the official sources below control over this table.

What are the official deadlines and fees on each side?

On the examination side the controlling deadline is the petition window that opens with a Notice of Deficiency. It runs 90 days from mailing, or 150 days if the notice is addressed to a person outside the United States, under 26 U.S.C. section 6213(a), checked August 19, 2026. The U.S. Tax Court charges a $60 petition filing fee under its fee schedule, checked August 19, 2026. Once that window closes the IRS assesses the proposed amount and the dispute over the number ends. The U.S. Tax Court page states the full rule and the printed-date caveat.

On the collection side the controlling deadline is the 30-day window to request a Collection Due Process hearing after LT11, Letter 1058, or a lien notice. A timely request preserves Tax Court review of the collection decision, per the Taxpayer Advocate Service checked August 19, 2026. Payment plans carry an IRS user fee, with waivers or reimbursement for low-income taxpayers, per the IRS payment-plans page checked August 18, 2026. An offer in compromise carries a $205 application fee plus an initial payment.

Official source: 26 U.S.C. section 6213, time for filing petition
Official source: U.S. Tax Court court fees
Official source: Taxpayer Advocate Service, Collection Due Process
Official source: IRS payment plans and installment agreements

The two cases reward different work.

In an examination the number is still contestable, so the work is substantiation and argument. In a collection case the number is fixed, so the work is choosing the payment path and protecting wages and accounts while it runs.

Cases move from one side to the other. An unprotested examination becomes a collection case once the tax is assessed and the balance goes unpaid. A collection case built on a wrong underlying number sometimes goes back through audit reconsideration, or through a liability challenge where the law allows one. Mr. Powell tried more than 75 cases to verdict for the State of Maryland and drafted more than 100 appellate opinions as counsel at the Appellate Court of Maryland before focusing on tax controversy. He is admitted in the District of Columbia, Maryland, and before the United States Tax Court, writes and speaks for the American Bar Association Tax Section, and is cited in Law360 Tax Authority for tax controversy analysis. The record is on the About page.

Questions

Common questions about audits and collection cases.

How do I know if my IRS letter is an audit or a collection notice?
Read what the letter asks for. Letter 525 and the other examination letters question items on a return and ask for records or agreement. A CP2000 proposes changes from third-party forms through the document-matching program, and the IRS treats it as a proposal rather than an examination. A collection notice such as CP14, CP504, or LT11 states an assessed balance and asks for payment. The code printed in the corner identifies the letter, and irs.gov publishes an explanation page for the common notice codes.
Can an IRS audit turn into a collection case?
Yes, and it routinely does. When the examination ends in an assessment and the balance goes unpaid, the file moves from the examination function to the collection function. The letters change from proposed adjustments to bills and levy warnings. From there the dispute shifts from whether the amount is right to how it will be collected through liens, levies, and payment arrangements. The amount itself is easiest to contest while the examination is still open.
How long do I have to answer an IRS audit letter?
Each letter prints its own response date, and the date printed on the notice controls. The one deadline with a statutory hard stop is the Notice of Deficiency. A petition to the U.S. Tax Court is due 90 days from mailing, or 150 days if the notice is addressed to a person outside the United States, under 26 U.S.C. section 6213(a), checked on uscode.house.gov on August 19, 2026. Missing an earlier examination deadline narrows the options, and missing the petition deadline closes the dispute over the amount.
What does this firm charge for an audit or a collection case?
An initial consultation is a call with Mr. Powell, and there is no charge for the call. The firm reviews the notice and the posture of the case, then quotes the fee in writing for the specific engagement before any work begins. Government fees are separate and are set by the agency. A United States Tax Court petition carries a $60 filing fee, and an offer in compromise carries a $205 application fee. The response date printed on the letter controls regardless of who answers it.

If the letter is already in hand.

IRS Letter Check explains a supported federal notice from the code printed on it. The audit hub sets out the examination paths, and the collections hub sets out the balance-due paths. CP14, CP504, and LT11 each have a plain-language page. Where the letter shows a response date, that date controls over anything on this page.

Send the letter code and the date printed on it.

Tell me whether the letter questions the return or asks for payment. Send only a high-level summary.

Schedule an initial consultation

Requesting a consultation does not make Mr. Powell your lawyer, provide legal advice, or protect a deadline.

Law Office of Alexander Powell, PLLC. 1629 K Street NW, Suite 300, Washington, DC 20006.