Receiving a letter from the IRS can be stressful, but it does not automatically mean you are being audited or that you are in serious trouble. The IRS sends notices for many reasons, including a balance due, a changed refund, a question about a return, an identity-verification request, or a correction made during processing.
The most important thing is to read the notice carefully and act by the deadline. Do not ignore it, even if you believe the IRS is wrong.
Quick answer: Verify that the notice is legitimate, find the notice number and deadline, compare it with your tax return and records, and follow the exact response instructions. Keep copies of everything you send.
1. Stay Calm, but Do Not Set the Notice Aside
An IRS notice may involve something simple, such as a math correction or a request for information. It may also involve a proposed tax change, unpaid balance, missing return, identity-verification issue, audit, or collection action.
Opening the letter and dealing with it early gives you more time to understand the problem. Waiting can allow interest or penalties to continue and may cause you to lose important dispute or appeal rights.
2. Make Sure the Notice Is Legitimate
A paper letter is not automatically proof that a request is legitimate. Look for a CP or LTR number, usually near the upper-right corner, and search for that number using the IRS page for understanding IRS notices and letters.
You may also be able to view certain digital notices, balances, payments, transcripts, and other information through your official IRS Online Account.
If the letter contains a website address, make sure it uses https and ends in irs.gov. If the notice number cannot be found or something looks suspicious, do not use unfamiliar payment links or contact information. The IRS recommends calling 800-829-1040 when a letter appears suspicious.
3. Find the Notice Number, Tax Year, and Deadline
Before deciding what to do, identify:
- The CP or LTR notice number
- The tax year or period involved
- What the IRS says is wrong or missing
- Any change to tax, penalties, interest, or refund
- What information the IRS wants
- The response or payment deadline
- The address, fax number, or secure upload instructions provided
Different notices have different rules. Do not assume the instructions from another IRS letter apply to yours.
Some deadlines are especially serious. A Notice of Deficiency, sometimes called a 90-day letter, generally gives a taxpayer 90 days from the date on the notice to petition the U.S. Tax Court. The period is generally 150 days when the notice is addressed to someone outside the United States. Read the exact notice and seek qualified help quickly because this deadline normally cannot be extended.
4. Compare the Notice With Your Tax Return
Pull out a complete copy of the return for the year listed on the notice. Then gather the records connected to the issue, such as:
- Forms W-2 and 1099
- Business income and expense records
- Receipts and invoices
- Estimated tax payment confirmations
- Bank and brokerage statements
- Credit or deduction documentation
- Earlier IRS correspondence
Check whether the IRS information matches the return you actually filed. Sometimes income was accidentally omitted. In other cases, the IRS may have incomplete information, duplicated a form, applied a payment incorrectly, or misunderstood a transaction.
If you need a better recordkeeping system, see our self-employed tax records checklist.
5. Decide Whether You Agree or Disagree
If you agree with the notice
Follow the requested action. The IRS says you generally do not need to reply when you agree unless the notice specifically asks for a response. If the IRS changed your return, update the copy you keep in your records so it matches the final result.
If you disagree with the notice
Follow the dispute instructions printed on the notice. Clearly explain what you disagree with and include copies of the documents supporting your position. Do not send original records unless the notice specifically requires them.
Respond by the due date to protect any appeal rights described in the notice. Keep a copy of your response and proof showing when it was mailed, faxed, or uploaded.
6. Use the Response Method Listed on the Notice
Some notices require a mailed response. Others may allow faxing or secure electronic upload. Use the method and address listed on your specific notice.
The IRS Document Upload Tool can accept JPG, PNG, and PDF copies for supported notices. You may need an access code or the notice number. The tool provides confirmation after documents are received. Do not use it to submit a tax return because the IRS does not process returns through that tool.
Before submitting anything, confirm that the notice number, taxpayer name, tax year, and requested documents are correct. Selecting the wrong notice type can delay the response.
7. If You Owe but Cannot Pay in Full
Do not ignore a correct balance just because you cannot pay it all at once. The IRS advises paying as much as possible by the due date because interest and some penalties may continue.
Depending on the situation, options may include:
- Paying the balance in full
- Applying for a short-term payment arrangement
- Requesting a monthly installment agreement
- Reviewing other collection alternatives when full payment is not possible
Use the official IRS information on payment plans and installment agreements. Approval, fees, and available terms depend on the amount owed, filing compliance, and other facts.
8. Know When You Need Credentialed Representation
Some notices can be handled by reviewing a return, correcting a filing mistake, or providing requested documents. Other matters involve audits, appeals, collection action, liens, levies, or Tax Court deadlines.
Enrolled agents, certified public accountants, and attorneys have unlimited representation rights before the IRS. A tax return preparer who only holds a PTIN generally does not have authority to represent clients before the IRS. Representation rules are explained in the IRS guidance on tax professional credentials and qualifications.
If a matter requires formal representation, an appeal, collection negotiation, or Tax Court action, seek an appropriately credentialed professional as early as possible.
9. Keep a Complete Notice File
Keep one folder containing:
- The original notice and envelope
- The related tax return
- Supporting documents
- Copies of every response
- Mailing, fax, or upload confirmation
- Notes from phone calls, including date, time, and the representative's name or identification number
- Any later letters resolving or changing the issue
Good records make it much easier to show what happened if the issue continues or another notice arrives.
Common Questions About IRS Notices
Does an IRS notice mean I am being audited?
No. The IRS sends notices for many reasons, including balances, refund changes, missing information, identity verification, and processing corrections. The notice number explains the specific issue.
Should I call the IRS immediately?
Read the entire notice and gather the related return and records first. If you call, use an official IRS number shown on IRS.gov or a verified number on the notice, and have the letter available.
Can I respond to an IRS notice online?
Sometimes. Certain notices may appear in an IRS Online Account, and supported notices may allow documents through the IRS Document Upload Tool. Follow the instructions on your exact notice.
What if the IRS notice is wrong?
Use the notice's dispute instructions, explain the disagreement clearly, and provide copies of supporting records by the deadline. A disagreement does not stop the deadline from running.
What happens if I ignore an IRS notice?
The IRS may continue processing the proposed change or collection action. Interest and penalties may continue, and you may lose dispute or appeal options. The result depends on the type of notice.
What if I lost the notice?
Check your IRS Online Account for available digital notices or call the IRS using an official number from IRS.gov. Have your identity and tax information ready.
How TaxGuard Can Help
TaxGuard Accounting Solutions can help review an IRS notice, compare it with the related return and records, explain what appears to have caused the issue, and determine whether return preparation or correction work may be appropriate.
TaxGuard does not provide IRS representation. Matters requiring representation, appeals, collection negotiation, or Tax Court action may require an enrolled agent, CPA, or attorney.
Do not include Social Security numbers or copies of the notice in the message field. Secure document instructions can be provided after the request is reviewed.
Sources
- IRS: Understanding your IRS notice or letter
- IRS: Online account for individuals
- IRS: Document Upload Tool
- IRS: Payment plans and installment agreements
- IRS: Understanding a Notice of Deficiency
- IRS: Tax return preparer credentials and representation rights
This article provides general educational information and is not individualized tax or legal advice. Deadlines and response rights depend on the specific notice. Review the letter itself and seek qualified assistance when needed.