How to read this guide

This article breaks down the most common IRS notices, explains how to prioritize them, and gives practical next steps. I draw on more than 15 years helping clients manage notices; the examples reflect real cases I’ve handled. This is educational content, not individualized tax advice—consult a qualified tax professional for decisions about your situation.

Why IRS notices matter

IRS notices affect more than just a single tax filing. They can:

  • change your tax balance and trigger interest and penalties,
  • start the collection process (levies, liens), or
  • request documentation that can prevent or stop an audit.

Ignoring a notice rarely makes it go away. Responding early limits financial and legal exposure. The IRS explains general guidance at “What to Do If You Receive a Notice or Letter” (IRS.gov).

Common notices, what they mean, and priority levels

Below are frequently received notices, how urgent they are, and immediate steps you should take.

  • CP2000 — Proposed Changes (High priority)

  • What it is: The IRS notifies you of a mismatch between income reported by third parties (W-2s, 1099s) and what you reported on your return. The CP2000 gives you a chance to agree or dispute (usually 30 days). (See IRS: CP2000 notice page: https://www.irs.gov/individuals/cp2000)

  • Immediate actions: Compare the CP2000 worksheet to your W-2s/1099s and tax return. If the IRS is correct, sign and pay or request an installment plan. If incorrect, gather supporting documents (pay stubs, corrected 1099s) and submit a written response.

  • Example from practice: A self-employed client received CP2000 due to a missing 1099-NEC. We obtained the payer’s corrected 1099 and submitted documentation; the proposed increase was withdrawn.

  • CP14 / Balance Due Notices (High priority)

  • What it is: Notice that the IRS believes you owe tax and requests payment. These notices can escalate to collection actions if ignored.

  • Immediate actions: Verify the tax year, compare to your return, and pay or arrange an installment agreement. If you disagree, respond in writing and include supporting documents.

  • CP22A / Account Adjustment (Medium priority)

  • What it is: The IRS adjusted your account after processing a return or amended return—this may show an increased refund or a tax due.

  • Immediate actions: Verify changes match your amended filing and update your records. If the change is wrong, follow the notice’s instructions to contest it.

  • CP501 and Reminder Notices (Low–Medium priority)

  • What it is: Reminders for unpaid balances. CP501 is a routine follow-up before more serious collection steps.

  • Immediate actions: Confirm the balance and payment terms; if you need more time, request an installment agreement.

  • Notice of Federal Tax Lien and Notice of Intent to Levy (Very high priority)

  • What it is: Lien notices make the government’s claim public; notices of intent to levy are immediate collection threats. These notices have major credit and legal impacts.

  • Immediate actions: Act immediately—contact the IRS to discuss options (installment agreement, offer in compromise) or consult the Taxpayer Advocate Service (https://taxpayeradvocate.irs.gov/). See our guide on protecting refund after intent to levy for practical steps: Protecting Your Tax Refund After an IRS Notice of Intent to Levy.

  • Audit or Examination Letters (CP—armored with documentation) (High priority)

  • What it is: Requests for documentation or notice of an audit. Audits can be correspondence (mail) or in-person.

  • Immediate actions: Collect records and respond by the deadline. Use a documentation checklist to prepare; see our article: How to Prepare for an IRS Audit: Documentation Checklist.

  • Identity Verification and Scam Alerts (Immediate priority for security)

  • What it is: The IRS may request identity verification, but many fraud scams mimic IRS language.

  • Immediate actions: Do not click links in emails or texts. Verify authenticity via IRS.gov and the number on the notice. The IRS provides scam and impersonation guidance at its newsroom. If you suspect fraud, report it promptly.

How to prioritize notices—simple triage

When you get an IRS notice, follow this priority checklist:

  1. Read the notice and identify the deadline—deadlines matter (CP2000 typically requires a response in 30 days).
  2. Categorize the notice: payment, documentation request, proposed change, lien/levy, or identity/scam.
  3. For payment demands and lien/levy threats, treat them as highest priority.
  4. For proposed changes (CP2000), gather records immediately—disputes often succeed with the right documents.
  5. For informational adjustments, file or update records and note for future tax returns.

Step-by-step response workflow (what I use in practice)

  1. Pause and scan: Confirm the notice is from the IRS (official mail, no request for payment via gift cards, etc.).
  2. Note deadlines: Circle the response date and plan at least one week to gather documents.
  3. Gather records: Pull the tax return, W-2s, 1099s, bank statements, corrected forms, and any correspondence.
  4. Draft a clear response: Quote the notice ID, explain your position, attach documentation, and include contact info and a signed statement.
  5. Use certified mail or an IRS-authorized electronic channel: Keep proof of mailing and your tracking number.
  6. If you owe and can’t pay: Apply for an installment agreement online or by phone; consider an Offer in Compromise only after professional evaluation.
  7. If you’re unsure: Contact a CPA, enrolled agent, or tax attorney. If the IRS has filed a lien or levy, call the Taxpayer Advocate Service if you face financial hardship.

In my practice, clients who followed this workflow resolved CP2000 and CP14 notices faster and with less interest than those who delayed.

When to appeal or take formal steps

  • If you disagree with a proposed change and cannot resolve it informally, you have appeal rights. For many notices you can request an appeal or file a formal protest. The IRS appeals process is described in our article on appeals and in IRS guidance (see IRS appeals pages).
  • For a Notice of Deficiency (90-day letter), you may petition Tax Court—this is a formal legal step and typically needs professional representation.

Common mistakes to avoid

  • Ignoring the letter: Deadlines can lead to extra penalties and forced collection.
  • Overpaying: Don’t pay before you confirm liability—if the IRS is wrong, you could lose leverage in negotiations.
  • Sending incomplete documentation: A partial response prolongs the issue.

Costs, penalties and interest—what to expect

Penalties and interest keep accruing while balances are unpaid. The IRS publishes current penalty and interest rates on IRS.gov and in notices. If you have reasonable cause (serious illness, natural disaster), the IRS can abate penalties—document the reason and request relief.

Additional resources and internal guides

Final practical checklist (ready to print)

  • Verify the notice is legitimate (IRS won’t initiate personal collection by email).
  • Read and record the deadline.
  • Gather original forms and supporting documents.
  • Respond in writing with copies, not originals.
  • Consider payment options if you owe (installment agreement, short-term extension).
  • Contact a qualified tax pro for complex disputes.

Where to verify official IRS guidance

Professional disclaimer: This article is educational and based on experience managing notices for clients. It is not personalized tax advice. For specific legal or tax guidance, consult a licensed CPA, enrolled agent, or tax attorney.

Author note: In my practice I emphasize documentation and timely response—those two actions consistently reduce penalties and stop collection escalation.