What to Do When You Get an IRS Letter

Few things make your stomach drop like an envelope from the Internal Revenue Service. Take a breath: the IRS sends millions of notices every year, and most can be resolved with a clear, timely response. Here’s how to handle yours.

Step 1: Don’t ignore it — and don’t panic

Most IRS letters have a response deadline, and ignoring them is what turns a small problem into a big one. Penalties and interest keep growing, and collection notices escalate. At the same time, a letter doesn’t automatically mean you’re in trouble. Many simply ask you to verify your identity, confirm a change or send a missing form.

Step 2: Make sure it’s really from the IRS

Scammers love to impersonate the IRS. The IRS generally makes first contact by mail. It won’t demand immediate payment by gift card, wire transfer or cryptocurrency, and it won’t threaten to have you arrested. To double-check a letter, look up its notice number on IRS.gov or sign in to your IRS online account — don’t call a phone number printed on a letter that seems suspicious.

Step 3: Identify the notice

Look for the notice or letter number, usually in the top or bottom right corner. Some of the most common:

• CP14 — You have a balance due. This is a bill, and usually the first one.
• CP501 and CP503 — Reminders that a balance is still unpaid.
• CP504 — Notice of intent to levy. The IRS can begin collection, starting with any state tax refund.
• LT11 or Letter 1058 — Final notice of intent to levy and of your right to a hearing. You generally have 30 days to request a Collection Due Process hearing, so act immediately.
• CP2000 — The income on your return doesn’t match what employers, banks or brokers reported. It’s a proposed change, not a bill, and you can agree or dispute it.
• CP3219A — Notice of deficiency, often called a “90-day letter.” It’s your window to petition the U.S. Tax Court before the tax is assessed.

Step 4: Compare it with your return

Pull out the return the notice refers to and check the IRS’s figures line by line. Is the income listed actually yours? Did you already pay? Was a form counted twice? Adjustments are often based on incomplete information — a brokerage form without cost basis, for example, can make a stock sale look like pure profit.

Step 5: Respond by the deadline

• If the IRS is right, pay what you owe or set up a payment plan. Paying promptly limits penalties and interest.
• If you disagree, respond in writing with an explanation and copies (never originals) of your supporting documents, using the response form and address in the notice.
• If you can’t pay in full, the IRS offers short-term payment plans and longer installment agreements, and many taxpayers can apply online. Depending on your situation, penalty relief, currently-not-collectible status or an offer in compromise may also be options.

Keep copies of everything you send, and use a mailing method you can track.

Step 6: Watch for follow-up

The IRS can take weeks or months to process a response. Keep an eye on your mail and your online account, and don’t assume silence means the matter is closed. If another notice arrives, compare it with your earlier correspondence before you respond.

When to get professional help

Call a tax professional right away if you receive:

• A notice of intent to levy (CP504, LT11 or Letter 1058)
• An audit letter or a notice of deficiency
• A notice about unfiled returns or unpaid payroll taxes
• Any letter you don’t understand, or several years of notices at once

Enrolled Agents and CPAs can represent you before the IRS with a signed power of attorney (Form 2848), which means the IRS talks to us instead of you. We pull your IRS transcripts, confirm what’s really owed and work toward the resolution that fits your situation. Learn more about our IRS problem resolution services, or upload your notice securely and we’ll take a look.

Prevent the next letter

Many IRS problems start with small mistakes: a missing 1099, estimated payments that fell short or payroll deposits made late. Year-round tax planning and accurate bookkeeping are the best protection there is.