What to Do When You Get a Letter From the IRS

Getting a letter from the IRS can make your heart sink, but knowing exactly what to do can turn a stressful situation into a manageable one. Here's your step-by-step action plan for handling any IRS letter.

Table of Contents

• Step 1: Don't Panic
• Step 2: Verify It's Legitimate
• Step 3: Read the Letter Carefully
• Step 4: Understand What IRS Wants
• Step 5: Gather Your Documents
• Step 6: Determine If It's Correct
• Step 7: Respond Appropriately
• Step 8: Keep Records
• Step 9: Follow Up
• When to Get Professional Help
• Common Scenarios and Responses

Step 1: Don't Panic

Why Panic Doesn't Help

Getting an IRS letter doesn't mean:

• You're going to jail
• You're being audited (necessarily)
• You did something wrong
• It's the end of the world

Most IRS letters are:

• Routine notifications
• Requests for information
• Math error corrections
• Payment reminders

The Reality

Statistics:

• Millions of taxpayers receive IRS letters each year
• Most are resolved easily
• Only a small percentage are serious
• Most don't result in audits or penalties

Your Mindset:

• Stay calm
• Take it one step at a time
• Most issues are fixable
• You have rights and options

Immediate Actions

Do This First:

1. ✅ Open the letter (don't ignore it)
2. ✅ Read it completely
3. ✅ Note the deadline
4. ✅ Don't make hasty decisions

Don't Do This:

1. ❌ Ignore it
2. ❌ Panic and make rash decisions
3. ❌ Assume the worst
4. ❌ Delay responding

Step 2: Verify It's Legitimate

IRS Letter Characteristics

Real IRS Letters Have:

• Official IRS letterhead
• Notice or letter number (CP11, CP14, etc.)
• Your name and address
• Tax year in question
• Specific amount (if applicable)
• Response deadline
• IRS contact information

Red Flags (Possible Scam)

Warning Signs:

• ❌ Demands immediate payment by phone
• ❌ Requests payment via gift cards, wire transfer, or cryptocurrency
• ❌ Threatens immediate arrest
• ❌ Asks for personal information via email
• ❌ Poor grammar or spelling
• ❌ Suspicious email address (IRS doesn't email first)

How to Verify

1. Check IRS.gov:

• Look up the notice number
• Verify it matches IRS format
• Check if it's a known scam

2. Call IRS Directly:

• Use official number: 1-800-829-1040
• Don't use number in suspicious letter
• Verify the letter with IRS

3. Check Your IRS Account:

• Log in to IRS.gov account
• See if notice appears in your account
• Verify details match

4. Know What IRS Never Does:

• ❌ Call demanding immediate payment
• ❌ Email first (without prior contact)
• ❌ Threaten arrest for tax issues
• ❌ Request payment via gift cards

If It's a Scam

What to Do:

1. Don't respond
2. Don't send money
3. Report to IRS (phishing@irs.gov)
4. Report to FTC
5. Check your credit (identity theft)

Step 3: Read the Letter Carefully

What to Look For

Essential Information:

1. Notice Number: CP11, CP14, CP2000, etc.
2. Tax Year: Which year is this about?
3. Amount: How much (if any)?
4. Issue: What's the problem?
5. Deadline: When do you need to respond?
6. Action Required: What do you need to do?

Understanding Notice Types

Common Notices:

CP11/CP12: Math error correction

• IRS found calculation error
• Usually straightforward
• Review and agree or dispute

CP14: Balance due (first notice)

• You owe money
• Payment requested
• Usually 21 days to pay

CP2000: Proposed changes

• Information mismatch
• IRS proposes changes
• 30 days to respond

CP75: Audit notice

• Return being examined
• Documentation requested
• More serious

CP504: Intent to levy

• Final warning before collection
• Very serious
• 30 days to respond

Key Sections

Read These Parts Carefully:

1. "What You Need to Do": Action required
2. "Amount Due": How much (if any)
3. "Due Date": When to respond/pay
4. "Why You Received This Notice": Explanation
5. "How to Respond": Instructions

Step 4: Understand What IRS Wants

Common Requests

1. Payment:

• You owe taxes
• Pay by deadline
• Or set up payment plan

2. Information:

• Missing documents
• Verification needed
• Explanation required

3. Agreement:

• IRS made correction
• Agree or dispute
• Respond by deadline

4. Documentation:

• Audit or examination
• Provide receipts
• Prove deductions

5. Verification:

• Identity verification
• Prevent fraud
• Verify return

Determine Urgency

High Urgency (respond immediately):

• CP504 (intent to levy)
• CP90/CP297 (final levy notice)
• Collection actions
• Deadline: 30 days or less

Medium Urgency (respond soon):

• CP2000 (proposed changes)
• CP75 (audit)
• Balance due notices
• Deadline: 30-60 days

Low Urgency (respond by deadline):

• Informational notices
• Refund notices
• Math error corrections (if small)
• Deadline: 60+ days

Step 5: Gather Your Documents

What You'll Need

Essential Documents:

• The IRS letter (obviously)
• Your tax return for that year
• W-2s and 1099s
• Receipts and records
• Prior correspondence (if any)
• Bank statements (if relevant)
• Any other supporting documents

Organize by Issue

If It's About Income:

• W-2s
• 1099s
• Bank statements
• Records of income

If It's About Deductions:

• Receipts
• Canceled checks
• Bank statements
• Documentation

If It's About Payments:

• Payment confirmations
• Bank statements
• Canceled checks
• Records of payments

If It's About Identity:

• Driver's license
• Social Security card
• Previous tax returns
• Other identification

Create a File

Organize Everything:

• Put letter in folder
• Add related documents
• Label clearly
• Keep copies (send originals only if required)

Step 6: Determine If It's Correct

Compare to Your Records

Check These:

1. Amounts: Do numbers match?
2. Tax Year: Is it the right year?
3. Calculations: Is IRS math correct?
4. Information: Is IRS information accurate?

Common Scenarios

Scenario 1: IRS Is Correct

• You made an error
• IRS correction is right
• You owe the money
• Action: Agree and pay

Scenario 2: IRS Is Wrong

• IRS made an error
• You have documentation
• You don't owe
• Action: Dispute with evidence

Scenario 3: Partially Correct

• Some parts are right
• Some parts are wrong
• Need to clarify
• Action: Respond with corrections

How to Verify

1. Check Your Return:

• Compare to what you filed
• Verify amounts
• Check calculations

2. Check Your Records:

• W-2s, 1099s
• Receipts
• Bank statements
• Other documentation

3. Recalculate:

• Do the math yourself
• Use tax software
• Verify IRS calculations

4. Research:

• Look up tax rules
• Check IRS publications
• Understand the issue

Step 7: Respond Appropriately

Response Options

1. Agree and Pay (if correct):

• Sign and return agreement
• Pay the amount
• Include payment or payment plan request

2. Dispute (if incorrect):

• Write explanation
• Provide documentation
• Explain why IRS is wrong
• Request correction

3. Request More Time (if needed):

• Explain why you need time
• Request extension
• Provide timeline

4. Request Payment Plan (if you can't pay):

• Complete Form 9465
• Or request online
• Pay what you can now

How to Respond

Method 1: Mail (most common):

• Use address in letter
• Include notice copy
• Include documentation
• Send certified mail (proof of mailing)
• Keep copies of everything

Method 2: Online (if available):

• Some notices can be responded to online
• Check IRS.gov
• Follow instructions

Method 3: Phone (for simple issues):

• Call number in letter
• Have notice and documents ready
• May be able to resolve over phone

Method 4: In Person (if complex):

• Schedule appointment
• Bring all documents
• May need professional help

What to Include in Response

Always Include:

• Copy of the notice
• Your response letter
• Supporting documentation
• Your contact information
• Your signature (if required)

If Disputing, Include:

• Clear explanation
• Documentation proving your case
• Calculations (if relevant)
• Request for correction

If Agreeing, Include:

• Signed agreement (if form provided)
• Payment (if paying in full)
• Payment plan request (if needed)

Step 8: Keep Records

What to Keep

Essential Records:

• Copy of IRS letter
• Your response
• All documentation sent
• Proof of mailing (certified mail receipt)
• IRS responses
• Payment confirmations
• Notes from phone calls

How to Organize

Create a File:

• One folder per tax year
• Label clearly
• Keep for 3-7 years
• Digital and paper copies

Why This Matters:

• May need for future reference
• Proof if issues arise
• Documentation for audits
• Tax planning

Step 9: Follow Up

After You Respond

1. Confirm Receipt:

• IRS should acknowledge
• May take 30-60 days
• Check your IRS account online

2. Monitor Your Account:

• Log in to IRS.gov
• Check status
• See if issue is resolved

3. Respond to Follow-Ups:

• IRS may request more information
• Respond promptly
• Don't ignore

4. Verify Resolution:

• Confirm issue is closed
• Get confirmation in writing
• Keep for records

If No Response

After 60-90 Days:

• Call IRS
• Check status
• Verify they received your response
• Follow up if needed

When to Get Professional Help

Get Help If

1. Large Amounts:

• Owe significant money ($10,000+)
• Can't afford to pay
• Need payment plan negotiation

2. Complex Issues:

• Audit notice
• Complex calculations
• Multiple issues
• Unclear what to do

3. Collection Actions:

• Intent to levy (CP504)
• Lien filed
• Wage garnishment
• Serious collection threats

4. You're Unsure:

• Don't understand the notice
• Don't know how to respond
• Need guidance
• Want peace of mind

5. Disputes:

• IRS is wrong
• Need to prove your case
• Complex documentation
• Need representation

Types of Help

1. Tax Professional (CPA or Enrolled Agent):

• Can represent you
• Can negotiate
• Understands tax law
• Cost: $200-$1,000+

2. Tax Attorney:

• For serious legal issues
• Complex disputes
• Collection defense
• Cost: $500-$2,000+

3. Low-Income Taxpayer Clinic:

• Free or low-cost
• For low-income taxpayers
• Cost: Free or sliding scale

Common Scenarios and Responses

Scenario 1: Math Error (CP11)

Situation: IRS found calculation error, you owe $500

Response:

1. Review the calculation
2. If correct: Agree and pay
3. If wrong: Dispute with explanation
4. Respond by deadline

Timeline: Usually 60 days

Scenario 2: Balance Due (CP14)

Situation: You owe $3,000, first notice

Response:

1. Verify amount is correct
2. If correct: Pay in full OR set up payment plan
3. If wrong: Dispute
4. Respond within 21 days

Timeline: Pay within 21 days (or set up plan)

Scenario 3: Information Mismatch (CP2000)

Situation: W-2 shows $55,000, you reported $50,000

Response:

1. Check your W-2
2. If IRS is right: Agree and pay additional tax
3. If IRS is wrong: Provide documentation
4. Respond within 30 days

Timeline: 30 days to respond

Scenario 4: Audit Notice (CP75)

Situation: IRS wants to examine your return, requests documentation

Response:

1. Gather requested documents
2. Organize and copy
3. Respond by deadline
4. Consider professional help
5. Be cooperative but protect your rights

Timeline: Usually 30 days

Scenario 5: Intent to Levy (CP504)

Situation: Final warning, IRS will seize assets if you don't pay

Response:

1. Don't ignore - This is serious
2. Pay immediately OR
3. Set up payment plan OR
4. Request collection due process hearing
5. Get professional help

Timeline: 30 days (very urgent)

Bottom Line

When you get an IRS letter:

1. Don't panic - Most are routine
2. Verify it's legitimate - Watch for scams
3. Read carefully - Understand what IRS wants
4. Gather documents - Have everything ready
5. Determine if correct - Compare to your records
6. Respond appropriately - Agree, dispute, or request help
7. Keep records - Document everything
8. Follow up - Ensure resolution

Key Takeaways:

• Most letters are routine: Not cause for panic
• All require response: Don't ignore any letter
• Verify legitimacy: Watch for scams
• Read carefully: Understand what IRS wants
• Respond on time: Deadlines matter
• Keep records: Document everything
• Get help if needed: Professional help is worth it

Action Steps:

1. Open and read the letter immediately
2. Verify it's from real IRS (not a scam)
3. Understand what IRS wants and why
4. Gather all relevant documents
5. Determine if IRS is correct
6. Respond appropriately by deadline
7. Keep copies of everything
8. Follow up to ensure resolution
9. Get professional help if situation is complex

Remember: Most IRS letters are routine and can be resolved easily. The key is to respond promptly and appropriately. Don't ignore letters—that makes everything worse. And don't be afraid to get professional help if you're unsure or the issue is complex. You have rights, and most issues are fixable.