Receiving a letter or notice from the IRS can be an unsettling experience, but it’s important to understand that these communications serve as the IRS’s formal way to convey important information regarding your tax account. IRS notices are not always indicators of problems; many are straightforward alerts, requests for information, or explanations about your tax return processing.

Why Does the IRS Send Notices?

The IRS issues millions of notices each year, triggered mainly when there’s a mismatch between the information reported on your tax return and what the IRS has received from third-party sources such as employers (W-2 forms), banks (1099 forms), or investment firms (1099-B). These automated systems flag discrepancies or missing information, math errors, or other issues that require taxpayer attention.

For example, if your employer reports $50,000 in wages, but your tax return only reflects $45,000, the IRS system will issue a notice to address this difference. Other common reasons include unaddressed payments, incorrect or missing signatures, or requests for clarification.

Common Types of IRS Notices

Each IRS notice has a specific code indicating its purpose. Knowing these can help you quickly identify what action is needed. Here are common IRS notices with examples and what they mean:

  • CP14: Balance Due Notice — Indicates you owe additional tax. It provides the amount due and the payment deadline.
  • CP2000: Underreported Income Notice — Sent when the income or credits you reported don’t match IRS records from third parties. This notice proposes changes and asks for your response. Learn more about this at IRS CP2000 Notice.
  • CP11, CP12, CP13: Math Errors or Refund Adjustments — Notify corrections resulting in a refund or balance due.
  • CP501, CP503, CP504: Intent to Levy Notices — Warns of unpaid taxes and potential collection actions like bank levies. The CP504 is a final warning before levy. For details, see IRS Notice CP504.
  • Letter 1058 / LT11: Final Notice of Intent to Levy — The IRS’s last warning before seizing assets. You have the right to a hearing. For more info, visit IRS Letter LT11.
  • Notice of Deficiency (Letter 3219) — A formal proposal increasing your tax liability, offering 90 days to dispute in Tax Court. Details at IRS Notice of Deficiency.

How to Handle an IRS Notice

  1. Stay Calm: Most notices can be resolved without severe consequences.
  2. Read Carefully: Take note of the notice type, reason, and deadline.
  3. Don’t Ignore It: Neglecting an IRS notice can lead to penalties, interest, or enforced collection.
  4. Verify Authenticity: IRS notices arrive by mail; the IRS does not initiate contact via email or phone. If suspicious, verify by calling the IRS directly at IRS.gov.
  5. Gather Documentation: Collect relevant tax forms, payment records, and correspondence.
  6. Respond Timely: Meet the deadlines stated; respond in writing and keep copies of all correspondence.
  7. Seek Help If Needed: Complex notices like audits or deficiency notices may require a tax professional’s assistance.

Real-Life Scenario: Missing Income

If you overlook reporting $1,500 earned as a freelancer, and the client files a 1099-NEC with the IRS, you may receive a CP2000 notice proposing additional taxes due. You can agree with the findings or contest them with supporting documents.

Who Receives IRS Notices?

Any taxpayer interacting with the IRS can receive notices, including individual taxpayers, business owners, and those expecting refunds or making estimated tax payments.

Common Mistakes to Avoid

  • Ignoring the notice
  • Dismissing legitimate mail as scams without verification
  • Failing to keep adequate records
  • Missing response deadlines
  • Sending original documents instead of copies

Frequently Asked Questions

Can the IRS send notices by email? No. All official IRS notices are sent through the mail.

What if I can’t pay the tax owed right away? The IRS offers payment plans and other hardship options.

How long do I have to respond? Deadlines vary; check your notice carefully.

Should I call or write to the IRS? For documentation or disputes, written responses sent via certified mail are preferred.

Additional Resources

For details on specific notices, you can visit our pages on IRS Notice CP14, IRS Notice CP2000, and IRS Notice CP504.

For official IRS guidance, see IRS.gov.