When an IRS notice arrives, your first three steps are: 1) verify it’s legitimate, 2) read the code and deadline, and 3) determine whether it’s informational or demands action. Prioritizing correctly prevents penalties, interest, and collection escalation. (See IRS guidance on understanding notices for more detail: https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter.)
Quick action checklist
- Verify legitimacy: Confirm sender information and match the notice code with IRS pages before sharing personal data. See our guide on how to verify a notice is legitimate for a step-by-step approach: https://finhelp.io/glossary/how-to-verify-an-irs-notice-is-legitimate-before-responding/
- Read the front page: The notice code (e.g., CP2000, CP501, CP504, LT11, CP3219A) and a response deadline are usually prominent.
- Prioritize by consequence: High-priority notices threaten immediate balance due, levy, or loss of appeal rights.
- Gather records: Match the IRS’s stated reason (W-2/1099 mismatch, math error, missing return) to your documents.
- Respond in writing when disputing: Keep a clear timeline and certified mail or e-filed proof.
Common IRS notices and how to prioritize them
| Notice | Typical meaning | What to do first |
|---|---|---|
| CP2000 | Proposed changes from third‑party income reporting (1099s) | High priority: respond within the stated window (commonly 30 days) to agree or dispute; include documentation (W-2s, corrected 1099s). (IRS CP2000 info: https://www.irs.gov/individuals/notice-cp2000) |
| CP14 / CP501 | Balance due reminders | Medium–high: pay, set up an installment agreement, or dispute if incorrect; ignoring increases penalties and interest. |
| CP504 / LT11 | Final notice before levy | High: these can precede enforced collection (garnishment/levy). Contact the IRS or a tax professional immediately. |
| CP3219A (Notice of Deficiency) | 90‑day letter to petition Tax Court | Very high: you generally have 90 days (150 if outside the U.S.) to file a petition in Tax Court to preserve appeal rights. |
| Math error / CP49 | Calculation discrepancies | Usually lower priority but respond to correct errors to avoid unnecessary assessments. |
How to verify a notice is legitimate
- Compare the notice code and content to official IRS pages before calling numbers on the letter. The IRS explains typical codes and contact paths on its site (https://www.irs.gov).
- Do not send bank login details or social security numbers by email. The IRS will not request payment by gift cards.
How to respond (practical steps)
- Read the deadline and follow the notice’s instructions exactly. Deadlines matter—some notices require action within 30 days, others give 90 days to preserve appeal rights.
- If the notice proposes a change you agree with, follow payment or filing steps on the notice or through IRS payment options. If you cannot pay, request an installment agreement or offer in compromise (see IRS payment options).
- If you disagree, send a clear written response with supporting documents. Use certified mail or another traceable method. Retain copies.
- If the notice involves collection (CP504, LT11), contact the IRS immediately to discuss hold options, or consult a professional to negotiate or request temporary relief.
When to involve a tax professional
- The notice threatens a levy, lien, or wage garnishment.
- You receive a Notice of Deficiency (CP3219A) and may need to petition Tax Court. See our Tax Court basics page for filing timelines: https://finhelp.io/glossary/tax-court-basics-filing-a-petition-after-a-notice-of-deficiency/
- You suspect identity theft or fraud (the IRS has special procedures for identity-theft-related notices).
Practical example from my practice
A client received a CP2000 proposing $12,000 of additional income. We prioritized the CP2000, collected corrected 1099s and bank records, and returned a timely written response. The IRS accepted the documentation and withdrew the proposed assessment, avoiding penalties and interest. Prioritizing response and having proper documentation was decisive.
Further reading and internal resources
- Decoding notice codes: Decoding IRS Notice Codes: A Plain-English Guide (https://finhelp.io/glossary/decoding-irs-notice-codes-a-plain-english-guide/).
- If you’re unsure how to read a notice or want a quick next-steps checklist, see: How to Read an IRS Notice: Quick Guide to Next Steps and Deadlines (https://finhelp.io/glossary/how-to-read-an-irs-notice-quick-guide-to-next-steps-and-deadlines/).
Authoritative sources
- IRS, “Understanding Your IRS Notice or Letter” (https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter).
- IRS, “Notice CP2000” (https://www.irs.gov/individuals/notice-cp2000).
- U.S. Tax Court rules on petitions after a Notice of Deficiency (for filing deadlines).
Professional disclaimer
This article is educational and not individualized tax advice. For recommendations tailored to your situation, consult a qualified CPA, enrolled agent, or tax attorney. If you have an urgent notice threatening collection, seek professional help promptly.
