What Are Common IRS Correspondences and How Should You Respond?

Receiving a letter or notice from the IRS can feel alarming, but most are routine communications that request clarification, correction, or payment. The key is to verify the notice, read it carefully for deadlines, gather supporting documents, and respond using the method the IRS specifies.

In my practice as a CPA, prompt, organized responses have repeatedly stopped problems from escalating. I’ve resolved CP2000 notices by supplying missing 1099s, cleared identity-verification holds after Letter 5071C, and negotiated installment agreements for taxpayers who could not pay immediately.

Below is a practical guide to the most common types of IRS correspondence, the actions they typically require, and step-by-step response advice.

Common types of IRS notices and what they mean

  • Letter 5071C (Identity Verification): Sent when the IRS detects suspicious activity or potential identity theft on a return. Action required: confirm identity using the IRS identity verification tool or by following the instructions on the letter. See the IRS identity verification guidance: https://www.irs.gov/identity-theft-fraud-scams/irs-letter-5071c-identity-verification (IRS).

  • Notice CP2000 (Proposed Changes): Indicates income or payment information the IRS has on file doesn’t match what you reported. It’s not a bill; it’s a proposed adjustment. Action required: accept the change, or respond with documentation showing why the IRS records are incorrect. Official IRS info: https://www.irs.gov/individuals/cp2000-notice-you-have-changes-to-your-tax-return (IRS).

  • CP14 / Balance Due Notices: These letters notify you of an unpaid tax balance and request payment. Action required: pay the amount, set up an installment agreement, or contact the IRS to dispute the amount.

  • Final Notice of Intent to Levy / Notice of Federal Tax Lien: Collection notices warn of enforcement actions (levy or lien) if tax debts remain unpaid. Action required: respond immediately — file collection appeals, request a Collection Due Process (CDP) hearing where applicable, or enter into a payment plan. IRS information on levies and liens: https://www.irs.gov/collections/levies (IRS).

  • Notice of Deficiency (the “90-day letter”): A statutory notice that allows 90 days to file a petition with the U.S. Tax Court if you disagree. Action required: file a petition with the Tax Court within the 90-day period, or pay the proposed deficiency and later pursue refund litigation if desired. See IRS overview of the deficiency process at https://www.irs.gov/credits-deductions/appeals (IRS Appeals guidance).

  • Identity-theft-related holds and refund delays: The IRS will send specific letters when a return is rejected or flagged for identity concerns. Action required: verify identity per the IRS instructions and submit identity-theft documentation if necessary (IRS identity theft: https://www.irs.gov/identity-theft-fraud-scams/taxpayer-guide-to-identity-theft).

First actions to take when you receive any IRS correspondence

  1. Stop and verify authenticity.
  • The IRS generally initiates contact by mail. If you received an unexpected call, text, or email demanding immediate payment, it may be a scam. When in doubt, compare the notice text to the IRS pages “Understanding Your IRS Notice or Letter” and “How to Verify the Authenticity of an IRS Notice” (see https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter and our guide on how to verify notices).
  • Use the exact notice code (e.g., CP2000, 5071C) and search IRS.gov for that notice to confirm instructions.
  1. Read the notice for the deadline and the required action.
  • Many notices require a written response within 30 days; some provide 60 or 90 days. Missing deadlines often limits your options and can increase penalties or move you into collections.

  1. Do not call third-party numbers printed on a suspicious notice; use IRS.gov contact info.

  2. Collect supporting documents before responding: W-2s, 1099s, bank statements, proof of payments, cancelled checks, prior-year returns, and correspondence.

How to respond based on the notice type (practical steps)

  • CP2000 (income mismatch):
  1. Compare the IRS-reported amounts to your records and the tax return in question.
  2. If the IRS is correct, sign the response and pay or set up a payment plan. If not, send clear copies of documents (1099s, corrected W-2s, statements) proving your position.
  3. Return the response in the envelope and address specified. Keep copies of everything.
  • Letter 5071C (identity verification):
  1. Follow the unique code or link provided on the letter to the IRS identity verification tool, or call the number listed on IRS.gov for identity verification.
  2. If you suspect identity theft, follow the IRS guide and complete Form 14039, Identity Theft Affidavit, if instructed (IRS: identity-theft guidance).
  • Balance due / CP14 and collection notices:
  1. Confirm the debt amount and check whether penalties or interest are included.
  2. If you cannot pay in full, apply for an online payment agreement (installment plan) or temporarily request an extension of time to pay. For low-income or complex cases, consult a tax professional about an Offer in Compromise.
  3. If you believe the amount is wrong, submit a written dispute with documentation.
  • Notice of Intent to Levy / Lien:
  1. Act immediately: levy and lien notices are collection escalations. Request a Collection Due Process (CDP) hearing if eligible, or call the contact listed on the notice to discuss options.
  2. Consider a lien withdrawal request if repayment is being made or if withdrawing the lien serves public interest.
  • Notice of Deficiency (90-day letter):
  1. If you disagree, file a petition with the U.S. Tax Court within 90 days. This preserves your rights to dispute the assessment without paying first.
  2. If you accept adjustments, paying the amount or arranging payment will end the matter.

Documentation and recordkeeping: a short checklist

  • Copy of the notice and the date you received it.
  • A cover letter summarizing your response and listing attached documents.
  • Supporting records: payroll records, receipts, corrected forms (e.g., corrected 1099), bank statements.
  • Proof of mailing: certified mail receipt or delivery confirmation if sending paper documents.
  • Date-stamped copies of everything you send.

Keeping a dedicated folder (digital + physical) for IRS correspondence helps when multiple notices arrive over months or years.

When to bring in a professional

  • If the notice involves a large dollar adjustment (six figures or complex business items).
  • If you receive a Notice of Deficiency (90-day letter) and intend to litigate.
  • If a levy or lien is imminent and you need urgent negotiation.

In my experience, early involvement of a CPA or enrolled agent often reduces penalties and shortens resolution time. A professional can package documentation, communicate formally with the IRS, and, when needed, represent you in appeals or collection hearings.

Avoiding scams and protecting your rights

  • The IRS will not demand payment using gift cards, cryptocurrency, or threaten immediate arrest. Report suspicious calls claiming to be the IRS to phishing@irs.gov and the Treasury Inspector General for Tax Administration (TIGTA).
  • Always verify a notice code at IRS.gov and use contact information from the IRS site rather than numbers printed on questionable documents.

Useful FinHelp.io resources

Final notes and disclaimer

This article explains common IRS letters and typical actions to take. It is educational and general in nature and should not be taken as individualized legal or tax advice. Tax rules change and individual circumstances vary — consult a qualified tax professional for guidance tailored to your situation. Author: seasoned CPA (15+ years) who regularly handles IRS correspondence for individuals and small businesses.

Authoritative sources cited: IRS — “Understanding Your IRS Notice or Letter” and specific notice pages for CP2000 and Letter 5071C (IRS.gov). See: https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter, https://www.irs.gov/individuals/cp2000-notice-you-have-changes-to-your-tax-return, and https://www.irs.gov/identity-theft-fraud-scams/irs-letter-5071c-identity-verification (accessed 2025).