What Letter 950-D (and 950-C) is
The 30-day letter "is issued in employment tax cases to advise taxpayers of all unagreed proposed adjustments to their tax liabilities" and of their appeal rights. Two versions exist: "Letter 950-D, Employment Tax 30-Day Letter: Issued for all non-IRC 7436 employment tax issues," which is the one a backup withholding examination produces, and "Letter 950-C, Employment Tax 30-Day Letter - Tax Court (TC), IRC 7436 Issue," for worker reclassification and section 530 determinations; "Separate 30-day letters are to be issued when both IRC 7436 and non-IRC 7436 issues are present" (IRM 4.23.22.6, Feb. 27, 2025). The letter encloses the examination report (Form 4668-B for withholding reported on Forms 1099 and W-2G), the agreement form (Form 2504 or 2504-T), Publication 5 and, for cases where the tax and penalties per return and period are $25,000 or less, Form 13683 for a small case request. Form SS-10 is enclosed when fewer than 365 days would remain on the statute by the time Appeals received the case.
The deadline
Thirty days from the letter date to sign the agreement, submit a protest or small case request, or ask for more time. Extensions "are normally granted for no more than 30 days" by the group manager on Letter 686 (IRM 4.23.22.9). For a 950-D with no response, "the case should be closed unagreed promptly for tax assessment after the 30-day suspense period (including extensions) has expired" (IRM 4.23.22.8.6). For a 950-C with no response the IRS "must" issue Letter 3523, which starts a 90-day Tax Court period.
What to do
Decide within the 30 days. To contest, send the protest the letter describes: a small case request on Form 13683 if each return and period is $25,000 or less, otherwise a formal written protest meeting Publication 5. A deficient protest is returned on Letter 1025-P with time to fix it. To agree, sign Form 2504 and pay the same day for an interest-free adjustment, or expect interest from the date the IRS receives the signed form. Consider asking for Fast Track Settlement before the letter issues if the examiner has not closed the case. If the letter concerns backup withholding on contractors who were also reclassified, note that the two sides travel separately: the classification side can reach the Tax Court, the backup withholding side cannot, and the IRS assesses the withholding and suspends collection while the Tax Court case runs (IRM 4.23.22.11.1).
Questions about Letter 950-D (and 950-C)
Who receives Letter 950-D (and 950-C)?
Payer or employer whose employment tax examination, including a backup withholding examination, ended without a signed agreement. The 30-day letter "is issued in employment tax cases to advise taxpayers of all unagreed proposed adjustments to their tax liabilities" and of their appeal rights.
What is the deadline on Letter 950-D (and 950-C)?
Thirty days from the letter date to sign the agreement, submit a protest or small case request, or ask for more time. Extensions "are normally granted for no more than 30 days" by the group manager on Letter 686 (IRM 4.23.22.9). For a 950-D with no response, "the case should be closed unagreed promptly for tax assessment after the 30-day suspense period (including extensions) has expired" (IRM 4.23.22.8.6). For a 950-C with no response the IRS "must" issue Letter 3523, which starts a 90-day Tax Court period.
What should I do when Letter 950-D (and 950-C) arrives?
Decide within the 30 days. To contest, send the protest the letter describes: a small case request on Form 13683 if each return and period is $25,000 or less, otherwise a formal written protest meeting Publication 5. A deficient protest is returned on Letter 1025-P with time to fix it. To agree, sign Form 2504 and pay the same day for an interest-free adjustment, or expect interest from the date the IRS receives the signed form. Consider asking for Fast Track Settlement before the letter issues if the examiner has not closed the case. If the letter concerns backup withholding on contractors who were also reclassified, note that the two sides travel separately: the classification side can reach the Tax Court, the backup withholding side cannot, and the IRS assesses the withholding and suspends collection while the Tax Court case runs (IRM 4.23.22.11.1).
Is Letter 950-D (and 950-C) about my own income tax?
No. This decoder covers information reporting and withholding: the notices a payer, filer or payee sees because of Forms 1099, W-2, 945 and the TINs on them. Individual income-tax notices follow a different track.
Have a different notice? The IRS notice decoder lists all 89 in the order they tend to arrive.