Quick overview

Receiving a balance due letter that you can’t find on the IRS website is stressful — I’ve helped dozens of clients in this situation over 15 years. The core priorities are: verify the notice is legitimate, understand why the balance exists, preserve your rights to dispute, and choose a payment or collection option that fits your cash flow. Below are practical, prioritized steps and professional tips to guide you through the process.

Step 1 — Confirm authenticity first

Why start here: scams are common, and tax scams often try to look like official IRS mail. Before you act, confirm the letter really came from the IRS.

  • Look for the notice/letter number and contact information in the top right or top of the notice. The IRS typically prints a notice code (for example, CP2000, CP14, etc.) and a 1-800 telephone number specific to notices (see the contact page on the notice).
  • If the notice has no notice number, looks handwritten, or requests immediate payment via gift card, cryptocurrency, or a third-party payment app, treat it as a scam (IRS guidance: “Tax Scams and Consumer Alerts”) (https://www.irs.gov/newsroom/tax-scams-consumer-alerts).
  • If you’re unsure, do not call a phone number printed on suspicious paper. Instead call the IRS at the official individuals’ number: 1-800-829-1040 (current as of 2025) or use the “View Your Account” tool online (https://www.irs.gov/payments/view-your-tax-account) to see whether the balance appears in your tax account.

In my practice: if a client is even slightly unsure, I recommend photographing the letter and checking their IRS online account before calling the IRS or sending payment.

Step 2 — Use IRS tools and records to verify the claim

  • Check the IRS online account: most legitimate notices will be reflected in your online account within a short time (https://www.irs.gov/payments/view-your-tax-account).
  • Order a tax transcript to compare the IRS’s assessment with your filed return. You can order transcripts online at IRS Transcript Service (https://www.irs.gov/individuals/get-transcript).
  • Compare the amounts, tax year, and reason codes on the notice with your return and 3rd‑party forms (W-2, 1099 series). A common reason for a balance due is unreported 1099 income.

Tip: Keep a dated checklist of documents you examine — this helps later if you need to dispute the notice or file an appeal.

Step 3 — Read the notice carefully and identify deadlines

Every IRS notice includes a statement about what action the IRS took and when you must respond. Typical deadlines appear in the notice itself. If the notice does not include a deadline, respond or contact the IRS within 30 days to preserve options and minimize penalties and interest.

Step 4 — If the notice is correct: choose a payment path

If your records confirm you owe the amount, don’t ignore it. Options include:

  • Pay in full: fastest way to stop interest and collection actions. Use IRS Direct Pay, debit/credit, or the Electronic Federal Tax Payment System (EFTPS) (https://www.irs.gov/payments).
  • Apply for an online installment agreement: if you cannot pay in full, consider an installment agreement. You can often apply online (https://www.irs.gov/payments/online-payment-agreement-application). For practical guidance on setting up a plan, see our guide to how to apply for an online installment agreement with the IRS.

Internal resources:

In my experience: elect direct debit for installment agreements when possible — it reduces the chance of default and makes the IRS more willing to accept favorable terms.

Step 5 — If you disagree, prepare a focused dispute

Disputes require evidence, clarity, and timeliness.

  • Gather proof: copies of the tax return, W-2s, 1099s, receipts, bank statements, canceled checks, or corrected forms issued by payers.
  • Follow the notice’s instructions for dispute. If it asks for a written response, include a clear explanation, copies (never originals) of supporting documents, and a cover letter with the notice number, tax year, and contact information.
  • Use certified mail or another tracked method and keep proof of mailing.
  • If the adjustment is significant, consider filing Form 3949-A or contacting a tax professional to prepare an organized protest.

Appeals and protections: if the IRS files a lien or levy, you may have Collection Due Process (CDP) appeal rights. The notice should tell you if CDP applies and how to request a hearing. You can also request assistance from the Taxpayer Advocate Service if you face economic hardship or persistent IRS processing delays (https://www.taxpayeradvocate.irs.gov).

Step 6 — Consider professional representation and power of attorney

If the amount is large, the situation is complex, or you’re getting collection notices (levy/lien), hire a CPA, EA, or tax attorney. If someone will represent you before the IRS, complete Form 2848 (Power of Attorney and Declaration of Representative) so the representative can talk to the IRS on your behalf.

In my practice: having a professional prepare the response reduces back-and-forth and often shortens the resolution time.

Documentation checklist (what to gather before you call or mail)

  • Copy of the IRS letter (front and back)
  • Your filed tax return for the year in question
  • W-2, 1099, 1098, or other 3rd-party forms for that year
  • Bank statements, invoices, receipts that support deductions/credits
  • Any amended returns or corrected 1099/W-2 issued by a payer
  • Proof of prior payments (bank or card statements)

Sample script for calling the IRS

“Hello. I received Notice [insert notice number] dated [date] for tax year [year]. The notice shows a balance of $[amount]. I want to confirm whether that balance is reflected on my account and ask for details about how it was calculated. My taxpayer ID is [XXX-XX-XXXX].”

Note: The IRS may ask verification questions and ask you to mail supporting documents. Keep a log of the call: date, time, rep name/ID, and summary of what was discussed.

When to worry about liens or levies

If you ignore balance-due notices, the IRS can file a Notice of Federal Tax Lien or issue a levy. A lien becomes public and can hurt credit and business transactions; a levy can seize bank accounts or wages. If the notice warns of levy or lien, act immediately to invoke your appeal rights or agree to a collection resolution (installment agreement, offer in compromise, or currently not collectible status). See our related guidance on tax liens and how to respond: https://finhelp.io/glossary/what-to-do-if-the-irs-files-a-notice-of-federal-tax-lien-against-you/.

Common pitfalls and how to avoid them

  • Don’t pay without verifying: scammers try to collect payments for bogus balances.
  • Don’t assume the IRS is always correct: clerical errors and third-party reporting mismatches happen.
  • Don’t miss deadlines: many rights and processes (appeals, CDP) require timely action.
  • Avoid informal promises: get collection agreements in writing.

Options beyond installment plans

  • Offer in Compromise (OIC): lets you settle for less than the full balance if you qualify. It’s documented and requires financial disclosure.
  • Currently Not Collectible (CNC): if you have no ability to pay, the IRS may temporarily halt collection; interest and penalties usually continue.
  • Penalty abatement: ask for first-time penalty abatement or reasonable cause relief if you have a valid explanation for the missed payment.

For help weighing these options, read our comparison: Choosing Between an Installment Agreement and Offer in Compromise (https://finhelp.io/glossary/choosing-between-an-installment-agreement-and-offer-in-compromise/).

Timeline expectations

Small correspondence items may be resolved in weeks; more complex disputes, appeals, or OICs can take months. If the IRS made an error, corrections are sometimes quick; if they need to audit or investigate records, expect longer timelines.

Final practical tips from my practice

Where to get official help and more information

Professional disclaimer: This article is educational and informational only and does not replace personalized tax advice. If your situation involves complex facts, significant tax amounts, or possible collection actions (lien/levy), consult a licensed CPA, enrolled agent, or tax attorney.

Quick next actions (one-paragraph checklist)

1) Verify authenticity via your IRS online account or by calling 1-800-829-1040; 2) Compare the notice to your tax return and third-party forms; 3) Gather documentation and either pay, set up an installment agreement, or prepare a written dispute; 4) If needed, engage a tax professional and file Form 2848 for representation.

If you’d like, I can help draft a short dispute letter template or a call script tailored to the notice you received.