I just got an IRS notice in the mail. What now?

Open the envelope and read the notice carefully. Look at the top right for the notice number, usually starting with CP or LTR. That code identifies what kind of notice it is, what the IRS wants, and the deadline. The majority of notices are routine math corrections, income matching questions, or balance dues that resolve with a simple response. A small percentage require professional help. Ignoring the notice is always the wrong move.

What is the first thing I should do when an IRS notice arrives?

Open the envelope. Read the notice carefully. Look at the top right corner for the notice number, usually starting with CP or LTR. That number tells you everything about what kind of notice this is, what they want, and how urgent it is. Do not ignore it, and do not panic.

The vast majority of notices are routine. Math errors on a return. A question about a deduction. A confirmation of something you already handled. Only a small percentage are actually audit related, and even most of those are correspondence audits that resolve with a letter exchange.

The worst thing you can do is toss the notice in a drawer and hope it goes away. IRS notices run on deadlines. Ignoring one sixty day notice can turn a routine question into a much harder problem.

What are the most common IRS notices, and what do they mean?

CP2000 (proposed changes based on income the IRS has that your return did not), CP14 (balance due), CP75 (earned income credit verification), and LTR 474C (identity verification) make up the majority of notices individuals receive. Each has a specific response procedure and a specific deadline.

A CP2000 is not an audit, despite how it sometimes reads. It is a proposed adjustment. The IRS is saying we received a form that shows this income, and your return does not reflect it, so here is what we think the tax should be. You can agree, disagree, or partially agree, and there is a form attached explaining exactly how to respond.

A CP14 is a balance due bill. It means the IRS processed the return, computed a balance, and wants payment. Setting up a payment plan is straightforward if you cannot pay it in full.

LTR 474C and similar identity verification letters are increasingly common because of identity theft. These are actually good news. The IRS held the return because something did not match, which is exactly what you would want them to do if someone tried to file in your name.

How do I respond to an IRS notice without making things worse?

Follow the instructions on the notice exactly. Use the enclosed response form if there is one. Include your contact information, the tax year, your taxpayer identification number, and a clear statement of whether you agree or disagree and why. Keep a copy of everything you send. Send it certified mail with return receipt if the stakes are meaningful.

Do not send a long narrative. Do not send documents the notice did not ask for. Do not call the IRS with the notice in front of you until you have read it twice. The response form on the notice is there because it is the fastest way to get routed to the correct team.

If the notice is wrong (and notices are sometimes wrong), you can disagree in writing and include the supporting documentation that proves the position on your return was correct. This is much easier when you have kept your records organized.

When should I call the IRS versus respond by mail?

Respond by mail for anything that requires a paper trail, which is most substantive notices. Call only when the notice specifically says to call, when you need to set up a payment plan that cannot be done online, or when you need clarification before responding in writing.

Phone hold times with the IRS can be long. Thirty minutes to two hours is normal during busy seasons. Write down the name of the representative, their badge number, the date, and a summary of the conversation. That documentation matters if anything needs to be escalated.

Most of the time, a well written letter gets a cleaner result than a phone call. The letter goes into the file. The call does not, unless you ask specifically and get written confirmation.

What if I miss the deadline on a notice?

Respond as soon as you can anyway. The IRS generally continues to work with taxpayers who are making good faith effort even after a deadline, although you may lose specific rights (like the ability to contest a proposed change in Tax Court before paying). Missing a deadline is a problem but usually not a fatal one.

Where a missed deadline really hurts is on collection notices and levy notices. Those have strict statutory timelines, and missing them can mean wages, bank accounts, or property become subject to levy. A professional response to those notices should happen in days, not weeks.

For routine notices (CP2000, CP14, and most letters), a late response is inconvenient but workable. The IRS would rather hear from you late than not at all.

When should I get professional help with a notice?

Any time the notice involves more than a few hundred dollars, any time it involves a business entity, any time the math is unclear to you, or any time the notice is a proposed audit adjustment or a collection action. Having a tax professional respond on your behalf is often significantly cheaper than trying to unwind a mistake later.

For Handled clients on a membership, notice support is built in. Forward the notice, we read it together, and we draft the response. For anyone else, a single consult on a notice is usually an hour or two of work and a much better outcome than a rushed self response.

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