TAS Tax Tip: I got an IRS notice; now what do I do?

The IRS will send a notice or a letter for any number of reasons. It may be about a specific issue on your federal tax return or account, explain changes to your account, ask for more information, or request a payment.

You can handle most of this correspondence without calling or visiting an IRS office if you follow the instructions in the notice.

However, sometimes these communications can be confusing and hard to understand. So, here are some tips to help you when you receive a notice or letter from the IRS. The first step is to identify the important information in the notice or letter.

Start by determining:

Reason the Notice or Letter Was Sent

Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue. If you still aren’t able to understand the information provided, the IRS has a Search Notice and Letters feature on the Understanding Your IRS Notice or Letter page.

You can find the notice (CP) or letter (LTR) number on either the top or the bottom right-hand corner of your correspondence. Once you find it, you can enter that number in the search box and you will be taken to a corresponding page that has more general information that may help.

In the Taxpayer Advocate Service, we also have a GET HELP section on various topics that can lead you through important information, steps and actions necessary to help you resolve many common tax issues.

Sometimes you do not need to take any further action, but sometimes you will.

Do I Need to Reply?

Whether you need to reply or not will depend on the issue.

If you agree with the information or change listed on the notice, generally there is no need to reply. That is unless the action causes a balance due, then you would need to take some action. Other times, even if you do agree, you may need to provide specific information to resolve the issue, particularly if you need to verify your identity.

If you disagree, you will need to act as soon as possible, as penalties and interest may be accruing, depending on the circumstances. The letter should outline what that action is and include a due date for your response.

Whether you agree or not, if it requires a reply – do not delay! Delaying can create more issues. See more on this below.

When to Respond By

If your notice or letter requires a response by a specific date, there are many reasons you’ll want to comply. Here are just a few:

minimize additional interest and penalty charges;
prevent further action from being taken on the account or against you; and
preserve your appeal rights if you don’t agree.

How and Where to Reply

All notices and letters should tell you where to send your response, whether it’s to a mailing address or fax number. (Note: The IRS generally does not allow communication via email yet, although they are currently working on developing some alternative digital communication options.)

Most correspondence can be handled without calling or visiting an IRS office if you follow the instructions in your letter or notice.

What If I Want to Talk to Someone?

Each notice or letter should include contact information. Some phone numbers on letters or notices are general IRS toll-free numbers, but if a specific employee is working your case, it will show a specific phone number to reach that employee or the department manager. The telephone number is usually found in the upper right-hand corner of your notice or letter.

As a last resort, you can use the IRS toll-free number, 1-800-829-1040. Have a copy of your tax return and the correspondence available when you call. But your best option is to use the specific number or address provided.

When Should I Ask for Help?

You can resolve most notices or letters without help, but you can also get the help of a professional – either the person who prepared your return, or another tax professional.

If you can’t afford help from a tax professional, you may be eligible for free or low cost representation from an attorney, certified public accountant, or enrolled agent associated with a Low Income Taxpayer Clinic (LITC). In addition, LITCs can provide language assistance if you speak English as a second language and need help understanding the notice or letter.

If your IRS problem is causing you financial hardship, you’ve tried repeatedly and aren’t receiving a response from the IRS, or you feel your taxpayer rights are not being respected, consider contacting us, the Taxpayer Advocate Service.

What Are Your Rights?

Every taxpayer has ten Rights when dealing with the IRS. For example, the Right to Be Informed, means the IRS should give you clear instructions about what you need to do to comply. You also have the Right to Pay No More Than the Correct Amount of Tax and the Right to Challenge the IRS’s Position and Be Heard. So, exercise those Rights and reply to the notice or letter if you disagree with the IRS, or provide the information needed so the IRS can get it right.

If any of those Rights aren’t being respected, again, you can contact us for assistance.

TAS Is Working to Improve IRS Notice Processes

The National Taxpayer Advocate is working hard to ensure the letters and notices taxpayers receive in the future are made clearer, provide more useful information, and have phone numbers that go to someone who can best help resolve the issue. For more information on these efforts, click on the links below labeled Blog and Annual Report to Congress.

Taxpayer Advocate Service Resources:

I got a notice from the IRS
TAS IRS Process Road Maps (These are visual representations of steps for certain IRS processes)
Note: TAS is working on expanding and developing these further to assist taxpayers in navigating IRS processes. Watch for more news on these in the future
NTA Blog: The IRS Should Redesign Its Notices Using Psychological, Cognitive, and Behavioral Science Insights to Protect Taxpayer Rights, Enhance Taxpayer Understanding, and Reduce Taxpayer Burden
2018 Taxpayer Advocate Annual Report to Congress (This annual report has several descriptions of IRS Notice issues under the Most Serious Problems section that you can read, such as Math Error Notices, Collection Due Process Notices, and Statutory Notices Of Deficiency.)
Taxpayer Rights

IRS Resources:

Source: taxpayeradvocate.irs.gov