What to do if you Receive a Notice From the IRS

02 Jun 2025 What to do if you Receive a Notice From the IRS

Opening your mailbox to find a letter from the IRS can be nerve-wracking. But before you assume the worst, know that many notices are routine and often resolved without much trouble.

The key is knowing what you’re looking at and how to respond. Understanding what IRS notices mean and how to act protects your rights, minimizes penalties, and often leads to faster, less stressful resolutions.

Common reasons you might hear from the IRS

IRS notices come in many forms, each tied to a specific issue. Here are some of the most common:

• Balance Due Notices (e.g., CP14 Notice): These indicate that, according to IRS records, you owe additional taxes, penalties, or interest.
• Math Error Notices (e.g., CP11 Notice): If the IRS finds a miscalculation or discrepancy on your return, they may adjust it and send a notice showing the correction.
• Request for Additional Information: Sometimes the IRS needs more documentation to verify items on your return, such as income, deductions, or credits.
• Notification of Changes (e.g., CP2000 Under-Reporter Notice): The IRS may correct or amend your return due to errors or processing updates. These notices detail what was changed and why.
• Audit Notifications: Less common, but more serious. Audit-related letters range from simple correspondence exams (handled entirely by mail) to in-person field audits.

First steps you should take

The moment you receive a notice from the IRS, your first priority should be to stay calm and approach the letter methodically. Start by reading the notice in full, not just the headline or balance due. Each IRS notice contains a specific code, usually in the upper right corner, that identifies its purpose (e.g., CP14 for a balance due, CP11 for a math error). You can use this code to look up additional information on IRS.gov, which can help you better understand the issue at hand.

Next, it’s critical to verify that the notice is legitimate. IRS-related scams are, unfortunately, common, especially during tax season. A genuine IRS notice will arrive by U.S. mail, not email or phone, and will never ask for payment via wire transfer, prepaid debit card, or gift card. The IRS may contact you by phone after sending a letter, but first contact is always by U.S. mail. If anything about the letter seems suspicious – incorrect formatting, threatening language, or unusual payment instructions – contact the IRS directly using the phone number listed on their official website to confirm whether the notice is real. Genuine IRS notices will not threaten arrest or immediate legal action without giving you a chance to respond first.

Finally, pay close attention to any deadlines stated in the letter. Every IRS notice gives a specific response date – commonly 21, 30, or 60 days, depending on the notice type. Missing that date can add penalties or limit your appeal rights, so mark it immediately. Whether the IRS is requesting payment, documentation, or clarification, missing this deadline can lead to additional interest, penalties, or even an assumption that you agree with the IRS’s findings. Acting promptly is essential, even if that action is simply reaching out to a tax professional for guidance on next steps.

By taking these early steps carefully and confidently, you set the tone for a smoother resolution and reduce the risk of unnecessary complications.

Common mistakes to avoid

Once you receive an IRS notice, how you respond can make a difference. One of the most damaging missteps is ignoring the notice altogether. It’s tempting to set it aside, especially if the content is confusing or stressful, but doing so can lead to serious consequences. Interest and penalties continue to accrue on unpaid balances, and inaction may prompt the IRS to initiate further enforcement actions, including liens or levies.

Another common mistake is assuming the IRS is always right and sending payment without reviewing the details. Notices may reflect errors in IRS data entry, misapplied payments, or misunderstandings about reported income or deductions. Blindly paying a balance due (especially a large one) without cross-checking against your filed return or supporting documentation can cost you more than necessary.

Equally problematic is responding out of frustration. Emotional reactions often lead to poorly written replies, missed opportunities to clarify key facts, or even unintentional admissions of fault. The IRS is far more receptive to well-organized, factual communication than to reactive or confrontational messaging. If you’re feeling overwhelmed, that’s a sign to pause – and possibly reach out to a tax professional who can help you craft a thoughtful response.

How professional accounting firms can help

IRS language can be dense or ambiguous, leaving many taxpayers uncertain about the meaning of a notice. CPAs can help interpret the notice you’ve received and clarify whether it is informational, requests action, or alleges an error. This helps clients avoid overreacting to routine correspondence or underestimating something more serious.

Beyond interpretation, accounting professionals can help prepare and organize the necessary documentation. Whether the IRS is requesting proof of deductions, additional income records, or clarification on a credit claimed, responding accurately and thoroughly is critical. A professional can ensure all supporting materials are complete, properly formatted, and submitted on time, reducing the likelihood of further inquiries or delays.

Accounting professionals can negotiate with the IRS on your behalf, respond to administrative appeals, and handle audits. They may request penalty abatements, set up installment payment plans, or formally dispute inaccuracies through a written response or administrative appeal. However, if legal action arises in U.S. Tax Court, representation requires a licensed attorney or a properly credentialed tax professional who is admitted to practice before the Court.

If the situation escalates into an audit, a firm that’s already familiar with your financial profile and the history of the issue is well-positioned to mount a credible and organized defense, protecting both your interests and your rights throughout the process.

When you should definitely call a professional

While some IRS notices are straightforward and can be resolved independently, there are certain situations where professional help is strongly advised.

If the dollar amounts involved are significant, particularly if the IRS alleges you owe thousands of dollars or more, an accountant can help assess the accuracy of the claim and explore options for minimizing penalties or interest. Likewise, if the language of the notice is confusing or if you simply don’t understand what the IRS is asking, it’s worth consulting a professional who can provide clarity and direction.

It’s also critical to seek expert support if you disagree with the IRS’s findings. Whether it’s a proposed adjustment to your income, a disallowed deduction, or a claim that you failed to file, a qualified accountant can evaluate the underlying issue and prepare a formal dispute. Attempting to handle disputes alone can inadvertently weaken your position, especially if deadlines are missed or if the supporting documentation is insufficient.

And if you receive notice of an impending audit, lien, or levy, professional representation is highly advisable due to the significant financial and legal consequences involved. In short, if there’s any doubt about how to proceed, don’t go it alone. The cost of expert advice is often far less than the potential consequences of a misstep.

Don’t delay, get clarity

Receiving an IRS notice isn’t the end of the world, but ignoring it could be. Most issues can be resolved efficiently with the right information and a timely response.

If you get a letter from the IRS, don’t wait. Contact our office right away. Quick action and expert guidance can make all the difference.

Contact The Haynie & Company CPA Firm For Tax Advisor Services