Thank you, BitBucket! Your suggestion worked perfectly.
SET @sqlcmd = 'sqlcmd -Q '
SET @cmd = '"SELECT LEFT(RTRIM(ServerName),15) as Server, LEFT(RTRIM(LoginName),22) as FailedLogin, LEFT(RTRIM(ClientName),20) as ComputerName, LoginDate from DBA.dbo.AuditDatabaseLogins WHERE AuditType = ''Login Failed'' AND LoginDate between ''' + convert(varchar(10), @PriorMonthStart, 112) + ''' and ''' + convert(varchar(10), @PriorMonthEnd, 112) + ''' " -o C:\AuditReports\TestSqlCmd44.txt'
SET @sqlcmd = @sqlcmd + @cmd;
Print @sqlcmd;
EXEC xp_cmdshell @sqlcmd,no_output;
John