Why the code matters
When the IRS sends a notice it includes a code and instructions. The code tells you at a glance why the IRS contacted you — common reasons include income mismatches, underpayment, missing forms, or collection activity. Treat the code as the headline: it identifies the problem and points you to the deadline and next steps.

Step-by-step response plan

  1. Read the notice and find the code and deadline. The notice’s first page will list the code, the amount (if any), and a due date. If you need help interpreting the notice, the IRS maintains explanatory pages such as “Understanding Your IRS Notice or Letter” (https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter) and the CP2000 overview (https://www.irs.gov/individuals/cp2000-notice) for income discrepancy notices.

  2. Verify it’s real before you act. Scammers sometimes copy IRS style. Confirm the notice by checking the IRS website guidance or calling the IRS number shown on the notice (not a number provided in a suspect email or text). Our guide on verifying legitimacy explains this process more fully: How to Verify an IRS Notice Is Legitimate Before Responding (https://finhelp.io/glossary/how-to-verify-an-irs-notice-is-legitimate-before-responding/).

  3. Compare the notice to your return and records. Match the IRS’s claim (for example, wage amounts or 1099s) with your W-2s, 1099s, bank statements, and prior returns. If the IRS’s figures are correct, follow the notice directions: pay, set up a payment plan (IRS payments: https://www.irs.gov/payments), or sign and return the agreement form.

  4. If you disagree, document why and respond in writing. Send a clear explanation, copies (never originals) of supporting documents, and keep proof of mailing or delivery. If you need representation, use Form 2848 (power of attorney) so your tax pro can speak to the IRS on your behalf.

  5. Consider your options if you owe. If you can’t pay in full, apply for an installment agreement or an Offer in Compromise through the IRS website. If the notice concerns collections, learn your rights and possible appeals at IRS Appeals (https://www.irs.gov/appeals).

Common notice examples (what they often mean)

  • CP2000: Income or payment mismatch based on information returns (W-2s, 1099s). It’s a proposed adjustment — respond with agreement or documentation. (IRS CP2000 guidance: https://www.irs.gov/individuals/cp2000-notice)
  • CP14/CP501: Notices about a balance due and subsequent collection steps. Pay or contact the IRS to avoid escalation.

Practical tips from my practice

  • Save every notice and create a single folder (digital or paper) per tax year. That chronological file speeds resolution and helps if you must appeal. In my 15 years helping clients, small delays (weeks) are what typically double the work needed to settle a notice.
  • Respond within the deadline. Deadlines are strict and ignoring them often leads to added interest, penalties, or enforced collection.
  • If you receive multiple notices at once, prioritize by due date and by whether a notice threatens levy or lien. Our article on reading and prioritizing multiple notices is a helpful companion: How to Read and Prioritize Multiple IRS Notices at Once (https://finhelp.io/glossary/how-to-read-and-prioritize-multiple-irs-notices-at-once/).

When to call a professional
Contact a CPA, tax attorney, or enrolled agent if the notice: proposes large additional tax, threatens levy or lien, involves identity theft, or requires legal interpretation. If you choose professional help, confirm they can represent you and file Form 2848 when needed.

Common mistakes to avoid

  • Ignoring the notice. Silence rarely fixes the issue and usually makes it worse.
  • Calling the wrong number. Use the contact on the notice or verify IRS phone numbers on IRS.gov.
  • Sending originals. Always send copies and keep records of what you mailed.

Resources and authoritative citations

Professional disclaimer
This entry is educational and reflects general best practices and my professional experience. It is not personalized tax advice. For guidance tailored to your situation, consult a licensed tax professional or the IRS directly.