What to Do If You Get an IRS Notice: A Practical Guide

Opening a letter from the IRS can be unsettling. But most IRS notices are not cause for panic — many are purely informational, some request simple clarifications, and only a small portion involve actual disputes over what you owe. The key is reading the notice carefully, understanding what it’s asking, and responding by the deadline if a response is required.

First: Read the Notice Carefully

Every IRS notice includes:

A notice number (in the upper right corner, beginning with CP or LTR) — this identifies the type of notice and what it’s about.
The tax year the notice applies to.
What the IRS believes you owe or what it needs from you.
A deadline for response — if a response is required, it’s critical to meet this date.
Contact information and instructions for how to respond.

Do not throw it away, ignore it, or assume it’s a scam without checking. Legitimate IRS notices always come by mail — the IRS does not initiate contact by email, text message, or phone call. (If you receive a call claiming to be the IRS, it is almost certainly a scam.)

Common IRS Notices and What They Mean

CP2000 — Proposed Changes to Your Return

One of the most common notices. The IRS received income information (from a 1099, W-2, or other form) that doesn’t match what you reported on your return. The notice proposes additional tax owed based on the discrepancy. This is not a bill yet — it’s a proposal. You have the right to agree or disagree. If the income was correctly reported and the IRS has an error, respond with documentation showing that. If the income was actually unreported, you can agree and pay the additional amount.

CP501, CP503, CP504 — Balance Due Reminders

These are increasingly urgent reminders that you have an unpaid balance. CP501 is the first reminder. CP503 is a second notice. CP504 is a final notice before the IRS begins collection action — including levying state tax refunds. If you receive a CP504, act quickly: contact the IRS to arrange payment or a payment plan, or dispute the amount if you believe it’s incorrect.

LT11 / CP90 — Final Notice of Intent to Levy

These are serious. The IRS is notifying you that it intends to seize assets (wages, bank accounts, property) to collect an unpaid balance. You have 30 days from the date of the notice to respond, request a Collection Due Process (CDP) hearing, or arrange a resolution. Do not ignore these notices.

CP12 — Refund Changed

The IRS corrected an error on your return and changed the amount of your refund. Usually no action required unless you disagree with the change.

CP14 — First Balance Due Notice

Your return was processed and shows a balance owed. This is the first bill after filing. Review it against your return — if the amount matches what you calculated, pay it or arrange a payment plan. If it doesn’t match, contact the IRS to clarify.

Letter 531 / 90-Day Letter — Notice of Deficiency

This is a formal legal notice that the IRS has determined you owe additional tax after an examination. You have 90 days to petition the U.S. Tax Court if you disagree. Missing this deadline waives your right to Tax Court review. This notice requires prompt professional attention.

What to Do When You Receive a Notice

Don’t panic. Most notices are routine. Read the entire notice before concluding anything.
Pull your records. Compare the notice to your filed return and supporting documents. Many discrepancies are simple — a 1099 you forgot to include, a math error, a payment not credited.
Respond by the deadline. Every notice that requires a response has a specific date. Missing it limits your options and can trigger additional penalties.
Agree or disagree in writing. If the IRS is correct, pay the amount or set up a payment plan. If they’re wrong, write a clear response with documentation — a copy of the relevant 1099, a bank statement, proof of payment.
Keep copies of everything. If you mail a response, send it certified mail with return receipt so you have proof it was received.
Set up a payment plan if you can’t pay in full. The IRS offers installment agreements — apply at IRS.gov/paymentplan or call 1-800-829-1040. A payment plan stops collection action while you pay.

When to Get Professional Help

Most CP notices can be handled on your own. Get professional help from a CPA, enrolled agent, or tax attorney if:

You receive a Notice of Deficiency (90-day letter) or Final Notice of Intent to Levy
The amount in dispute is large
You have unfiled returns from prior years
You’re facing an audit
You believe you may be a victim of tax identity theft
You’re dealing with payroll tax issues as a business owner

Enrolled agents and CPAs who specialize in IRS representation can often resolve issues faster than dealing with the IRS directly, and they can represent you in appeals and Tax Court.

IRS Scams vs. Real Notices

Real IRS notices always arrive by postal mail. The IRS will never:

Call you demanding immediate payment without first mailing a bill
Demand payment via gift cards, wire transfer, or cryptocurrency
Threaten to send police or immigration officers for non-payment
Require a specific payment method and refuse alternatives
Contact you by email, text, or social media about a tax debt

If you receive a suspicious call claiming to be the IRS, hang up. You can verify whether the IRS actually has an issue with your account by calling 1-800-829-1040 or checking your IRS online account at IRS.gov/account.

What to Do If You Get an IRS Notice: A Practical Guide

First: Read the Notice Carefully