First things to do the day you receive a CP/Letter

  1. Don’t panic—read the entire letter. The IRS letter (or CP notice) will identify the tax year involved, the reason for contact, any proposed changes, and a deadline. Most CP letters explain whether the IRS proposes additional tax, a reduced refund, or an information/identity request. (See IRS: Understanding IRS Notices and Letters: https://www.irs.gov/letters.)

  2. Verify authenticity. Confirm the letter is from the IRS (official IRS letters arrive by U.S. mail). The IRS will not initiate contact by email for new collection matters. If you suspect a scam, compare the details to official IRS guidance and report suspected fraud to the IRS and the Treasury Inspector General for Tax Administration. (IRS guidance on scams and letters: https://www.irs.gov/identity-theft-fraud-scams)

  3. Note the deadline and next actions. Most CP notices give 30 days to respond if you disagree or to request changes; however, statutory notices (for example, a Notice of Deficiency) have longer but strict appeal windows (typically 90 or 150 days to petition the Tax Court). Don’t assume every notice is 30 days—read the specific letter carefully. (IRS letters page: https://www.irs.gov/letters)

  4. Create a working file. Immediately photocopy or scan the letter and any recent tax returns, W-2s, 1099s, bank statements, or supporting documents specific to the issue. Label files by tax year and letter ID.

Typical timeline and what each window means

  • Day 0–3: Open, authenticate, and scan the letter. Note the IRS date and your deadline.
  • Day 3–14: Collect documents. Pull the tax return in question, third-party forms (W-2, 1099 series), and receipts that support your position.
  • Day 7–21: Decide how to respond. Options usually include: accept and pay, accept and request installment or hardship relief, agree but request an adjustment, or dispute (provide documentation and a written explanation).
  • Day 21–30 (or by the letter’s stated deadline): Submit your response. Use certified mail if sending originals by post and retain proof of mailing. If the letter provides a reply form (many CP notices include one), complete it and attach supporting documents.
  • 30–90 days after response: The IRS typically processes responses and sends an acknowledgment or a follow-up. If you submitted a full dispute packet, processing can take several weeks to months depending on complexity and IRS workload.

Note: Certain notices trigger faster enforcement if ignored—collection notices may lead to liens or levies after additional notices and steps. Always respond or call the IRS to avoid escalation.

How to decide your response: accept, pay, dispute, or negotiate

  • Accept and pay if the change is correct and you can pay in full. Paying promptly reduces interest and stops further collection steps. You can pay online or by other IRS-approved methods. (IRS payments information: https://www.irs.gov/payments)

  • Request a payment plan if you owe and cannot pay in full. The IRS offers short-term and long-term installment agreements and online setup for many taxpayers. If you have financial hardship, ask about currently not collectible status. (IRS payment plans: https://www.irs.gov/payments/installment-agreement)

  • Dispute the notice if the IRS data is wrong. Provide a clear, organized explanation and copies (not originals) of supporting documents—W-2s, 1099s, receipts, canceled checks—showing your reported income and deductions are correct. For CP2000 and similar underreporter notices, follow the instructions on the notice and attach the appropriate response form.

  • Request penalty relief if penalties are shown and you have reasonable cause. Common reasons include serious illness, natural disaster, or incorrect third-party reporting. Also check first-time penalty abatement rules if you meet the criteria.

Documentation checklist to include with your response

  • Copy of the IRS letter and the CP/notice ID.
  • A cover letter that briefly states your requested action (agree, disagree, accept revised amount, request installment, etc.).
  • Copies of the tax return for the year in question (Form 1040, schedules, or business returns).
  • Third-party forms: W-2, 1099, 1098, K-1.
  • Receipts, invoices, bank statements, canceled checks, or other proof supporting disputed amounts.
  • If you’re authorizing someone else to talk to the IRS, include Form 2848 (Power of Attorney) or Form 8821 (Tax Information Authorization).

If you disagree: how to appeal and what to expect

Most CP notices include instructions and a return envelope or contact information for disputing the proposed adjustment. The process typically requires:

  1. A written statement explaining why you disagree.
  2. Copies of supporting documentation keyed to each item the IRS lists as incorrect.
  3. Completion of any forms the notice requires (for CP2000, use the response portion of the notice and provide copies of the 1099/W-2 in question).

If the IRS maintains its position after review, you generally have administrative appeals options (Appeals Office), and in some cases you can take the case to Tax Court. Appeals and Tax Court petitions have their own deadlines—don’t miss them. For complex disputes, consider a tax professional experienced in IRS correspondence. (Taxpayer Advocate Service and IRS appeals resources: https://www.taxpayeradvocate.irs.gov/ and https://www.irs.gov/appeals)

Common CP letter types and special notes

  • CP2000 (proposed changes for unreported/underreported income): Usually provides a 30-day window to respond. If you agree, pay or set up an agreement; if you disagree, provide documentation. See our detailed guidance: Responding to a CP2000 Notice: Steps to Take.

  • CP12 (refund change): Often asks you to confirm return details to release a refund. Respond promptly to avoid refund delays.

  • CP22/CP23/CP25 (changes to tax amounts/refund): Review the adjustments and appeal if you disagree.

  • Identity/verification letters: These require specific identity verification steps—follow the exact instructions and use IRS identity resources.

For a concise list of common notices and how to prioritize them, see our guide: Timeline for Responding to Most Common IRS Notices.

When to call the IRS and when to hire help

Call the IRS if you need clarification and the notice provides a taxpayer assistance number. Expect long wait times; prepare the letter and your documentation before calling.

Hire a tax professional (CPA, enrolled agent, tax attorney) when:

  • The dollar amounts are large or involve multiple years.
  • You face collection action (notice of intent to levy, lien filing, or a statutory notice of deficiency).
  • You need representation in appeals or Tax Court.

If you prefer a DIY approach, consider using the IRS’s online tools to track notices, payments, and refunds. Our walkthrough explains how to use those tools: How to Use IRS Online Tools to Check Notices, Payments, and Refunds.

Consequences of ignoring a CP letter

Ignoring an IRS CP notice rarely makes it go away. Possible consequences include additional interest and penalties, collection actions (liens, levies), and interception of refunds. If you cannot respond by the deadline, contact the IRS immediately to explain—this can sometimes buy time or prevent automatic enforcement, but it is not a substitute for a full response.

Practical examples from experience

In my 15+ years advising taxpayers, the most common avoidable mistake is delay. One client received a CP2000 for unreported 1099 income; because they gathered the original 1099 and bank statements and mailed a clear, documented dispute within the 30-day window, the IRS reversed the proposed adjustment. Another client ignored a CP12 refund change; the delay caused their refund to be held for an extra six weeks and required repeated calls to clear up the issue.

Frequently asked questions (brief)

  • What if I miss the deadline? Contact the IRS immediately. You may be charged interest and penalties; but quick outreach can sometimes prevent automatic enforcement while you arrange documentation or payment.

  • Can I pay part now and dispute the rest? Yes—if you are able to pay some or all to limit interest, note in writing that you are paying under protest and continue to dispute the remaining amount. Consult a tax professional for larger disputes.

  • Are IRS letters enforceable? Yes. IRS notices are formal communications and can lead to enforced collection steps if not addressed.

Helpful IRS references and resources

Final checklist & closing advice

  • Read the letter fully and verify authenticity.
  • Mark the deadline, scan a copy, and create a response file.
  • Assemble supporting documents and decide whether to accept, dispute, or negotiate.
  • Respond in writing by the deadline; use certified mail and keep proof.
  • If you owe and can’t pay, request an installment agreement or collection relief.
  • When in doubt or if the matter is complex, hire a qualified tax professional.

Professional disclaimer: This article is educational and not individualized tax advice. For guidance tailored to your specific situation, consult a licensed tax professional (CPA, enrolled agent, or tax attorney). Information and links are current as of 2025 and reference IRS pages; check official IRS resources or a tax pro for updates.