Responding to a 30‑Day Letter: Timelines, Options, and Next Steps

Overview

A 30-Day Letter from the IRS signals that the agency has identified an issue with a filed tax return or reported tax liability and wants you to respond before it takes further action. Unlike routine informational notices, a 30-day letter sets a deadline to either agree with the IRS’s proposed adjustment, provide documentation to refute it, or request an appeals conference. Timely, factual responses often prevent escalation to enforced collections or a field audit.

(If you need official IRS guidance on responding to notices, see the IRS page on responding to notices and letters: https://www.irs.gov/individuals/responding-to-notices-or-letters.)

Typical timeline and deadlines

• Day 0: Letter delivered and date of notice indicated. Read it immediately.
• Typical deadline: 30 calendar days from the date on the letter (verify the date on your specific notice).
• If you need more time: request it in writing before the deadline; approval is discretionary.
• After the deadline: the IRS may assess the proposed change, begin collection, or open a different enforcement process.

Always confirm the exact deadline printed on your letter. The IRS sometimes gives a different time period depending on the notice type and the proposed action.

How to read a 30‑day letter

A 30‑day letter will usually contain all or most of the following components:

• A clear description of the proposed change or concern (e.g., unreported income, disallowed deduction).
• A request for specific documents or facts to support your return.
• The deadline for response and the method for replying (mailing address, fax, or online portal).
• The consequences if you do not respond, including potential assessment of tax, penalties, and interest, or referral to collections.

Key first step: identify which tax year and line items are at issue. That narrows the records you must produce.

Response options and when to use each

1. Accept the proposed adjustment

• Use this when the IRS calculation is correct and you prefer a fast resolution.
• Pay the assessed balance, or arrange payment (see payment options below). Accepting ends the 30‑day window and the matter, though you may still have limited appeal rights depending on the notice.

1. Dispute the adjustment by filing supporting documentation

• Best when you have records that show the IRS’s information is incomplete or incorrect (1099s, W‑2s, bank records, receipts, cancelled checks, invoices).
• Send a concise cover letter that cites specific documents and explains why the proposed change is wrong.

1. Request more time

• If you cannot assemble records quickly, send a written extension request before the deadline. State a reasonable reason and an estimated delivery date. Extensions are granted at the IRS’s discretion; they are not guaranteed.

1. Request an appeals conference

• If you disagree with the proposed adjustment after submitting evidence, you can ask to appeal. The 30‑day letter often tells you how to request an administrative appeal. Appeals typically preserve your rights under Collection Due Process if the matter proceeds to levy or lien.

1. Hire representation (CPA, EA, or tax attorney)

• If the issues are complex or large in dollar value, hire representation and file Form 2848 (Power of Attorney) so a pro can communicate with the IRS on your behalf. In my practice, early professional involvement often reduces back-and-forth and prevents escalations.

What to include in your response

• A professional cover letter that references the letter’s date and notice number. Keep it factual and organized.
• Copies (not originals) of all supporting documents, labeled and cross‑referenced to the issues raised.
• A chronological summary of transactions if the dispute covers multiple months or payments.
• A signed statement of facts if there were extenuating circumstances.
• A clear contact name and daytime phone number.

Ship via certified mail with return receipt, or use the IRS delivery method specified in the letter. Retain a complete copy of everything you send.

Documentation checklist (common items)

• W‑2s and 1099s
• Bank and merchant statements
• Invoices and receipts
• Canceled checks or proof of payment
• Contracts or engagement letters
• Mileage logs and mileage reimbursement records for business-use disputes

Payment options if you owe taxes

• Pay in full (online payment options: IRS Direct Pay, debit/credit, EFTPS). See IRS payment options (irs.gov/payments).
• Installment agreement: request short‑term or long‑term payment arrangements.
• Offer in Compromise (OIC): for taxpayers who cannot pay full liability; eligibility is narrow and requires detailed financial disclosure.

If you receive a 30‑day letter and need to preserve appeals rights, be careful when sending payments — discuss with a professional if collection alternatives are being considered.

Consequences of not responding

Ignoring a 30‑day letter can lead to one or more of the following:

• The IRS can assess the proposed tax and add penalties and interest.
• The case may move to enforced collection, including tax liens or levies.
• The IRS may refer the matter for additional enforcement or open a separate audit.

Responding—even with a request for more time—shows good faith and typically prevents immediate collection actions.

When to hire a tax professional

Consider professional help when:

• The dollar amount at stake is large.
• You lack the documents the IRS requests.
• The proposed adjustment involves legal questions (e.g., business vs. hobby, employment classification).
• The IRS threatens collection actions (lien, levy) or you are nearing a statute‑of‑limitations deadline.

In my experience advising clients, early engagement of a CPA, enrolled agent, or tax attorney frequently narrows the dispute and improves the outcome. Use Form 2848 to authorize representation.

Appeals and Collection Due Process

If your matter proceeds and the IRS issues a notice of intent to levy, you may be entitled to Collection Due Process (CDP) rights. The 30‑day letter sometimes includes instructions for requesting an appeal or a CDP hearing—follow them exactly and promptly to preserve appeal rights. See the IRS appeals information for more details (irs.gov/appeals).

Practical tips and common mistakes

• Don’t overload your initial response with unrelated documents—be targeted and organized.
• Don’t ignore the deadline: file a short extension request if needed.
• Avoid informal phone calls without a proper record—prefer written submissions or send a follow‑up email confirming phone discussions.
• Use certified mail or the IRS’s instructed method and keep proof of delivery.
• If you accept responsibility, address payment arrangements quickly to limit interest and penalties.

Common misconceptions: the IRS “forgets” about unresolved notices (false) and all notices are simple administrative errors (not always). Treat a 30‑day letter seriously.

Related FinHelp articles

For practical preparation and follow‑up, see these related FinHelp guides:

• Preparing for a correspondence audit: Remote documentation tactics — https://finhelp.io/glossary/preparing-for-a-correspondence-audit-remote-documentation-tactics/
• What to expect during an IRS correspondence audit: A step‑by‑step guide — https://finhelp.io/glossary/what-to-expect-during-an-irs-correspondence-audit-a-step-by-step-guide/
• How to gather records for an IRS audit: A step‑by‑step guide — https://finhelp.io/glossary/how-to-gather-records-for-an-irs-audit-a-step-by-step-guide/

These articles offer stepwise checklists useful when you assemble a response to a 30‑day letter.

Frequently asked questions (brief)

Q: Can I appeal after I agree to the IRS’s change?
A: Often, agreeing may limit appeal rights. Before accepting, confirm whether the letter preserves appeal rights. If in doubt, consult a professional.

Q: What if the IRS used third‑party data (e.g., payer 1099) that’s wrong?
A: Provide corrected documents and contact the payer to issue corrected forms if possible.

Q: How long will resolution take after I respond?
A: It varies. Simple responses can be resolved in weeks; complex disputes or appeals may take months.

Sources and further reading

• IRS — Responding to IRS notices and letters. https://www.irs.gov/individuals/responding-to-notices-or-letters
• IRS — Appeals. https://www.irs.gov/appeals
• Consumer Financial Protection Bureau — handling tax-related collections (for consumer protections and rights).

Professional disclaimer: This article is educational and does not substitute for personalized tax advice. For specific guidance about your 30‑day letter, consult a licensed tax professional (CPA, enrolled agent, or tax attorney) familiar with IRS notices.

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Author note: With 15+ years in financial services, I’ve helped clients respond to correspondence and correspondence‑style notices; early, organized responses usually produce better results and preserve legal options.