When the IRS contacts you through mail, understanding whether you have received an IRS letter or an IRS notice is key to determining the urgency and necessary next steps.
What Is an IRS Notice?
An IRS notice typically indicates that the IRS needs you to take action. This may involve paying additional taxes, correcting information, or providing missing documents. Notices often contain codes (such as CP14, which means a balance due) that help identify the issue. They come with deadlines, and ignoring them can result in penalties or interest.
What Is an IRS Letter?
IRS letters are usually informational and less urgent. They clarify account details, confirm receipt of payments, or provide general tax guidance. For example, Letter 5071C is for identity verification; Letter 226J relates to Affordable Care Act shared responsibility penalties, which usually don’t require immediate payment.
Key Differences
| Aspect | IRS Letter | IRS Notice |
|---|---|---|
| Purpose | Inform or clarify without immediate action | Requests payment, response, or correction |
| Tone | Informative, explanatory | Direct, often includes deadlines |
| Examples | Letter 5071C (Identity Verification), Letter 226J (ACA info) | Notice CP14 (Balance Due), Notice CP2000 (Proposed Change) |
| Action Needed | Usually none or response without payment | Typically requires payment or response |
| Frequency | Less common, for specific cases | More frequent, issued to many taxpayers |
How to Handle IRS Letters and Notices
- Read Carefully: Identify what the IRS wants—payment, documents, or acknowledgement.
- Check Deadlines: Notices often include dates by which you must respond to avoid penalties.
- Don’t Ignore: Ignoring IRS mail can lead to increased penalties.
- Verify Authenticity: Use IRS official contact numbers found on IRS.gov to avoid scams.
- Keep Records: Maintain copies of all correspondence for your files.
Who Receives These Communications?
Nearly all taxpayers receive IRS letters or notices at some point. Notices usually arise from tax return discrepancies or unpaid amounts, while letters often pertain to identity verification, account updates, or informational guidance.
Frequently Asked Questions
-
What if I lose my IRS notice or letter?
You can access your IRS account online at IRS.gov or call the IRS with information from your last notice. -
How soon should I respond?
Deadlines vary, but prompt response helps avoid additional charges. -
Can I call the IRS to clarify a notice?
Yes, use the phone number on the notice or IRS.gov, and have your documentation ready. -
What if I disagree with the IRS?
Follow the dispute process outlined in the notice, which may include submission of evidence or requesting an appeal.
Conclusion
Understanding the difference between an IRS letter and notice ensures you respond appropriately to maintain compliance and avoid unnecessary penalties. Notices usually require immediate attention or payment, while letters provide explanations or account updates. Staying informed and proactive with IRS communications protects your financial standing.
For more detailed guidance on responding to IRS communications, visit IRS Understanding Letters and Notices. For a broader overview of managing tax issues, check out our related glossary articles on IRS audits and tax debt management.
