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I Received an IRS Notice—Now What?

Opening your mailbox and finding a letter from the IRS can be intimidating. Many people immediately assume they're being audited or that they've done something wrong.

In reality, most IRS notices are simply requests for information or notifications about your tax account. The important thing is not to ignore them.

Here's what you should do if you receive an IRS notice.

Step 1: Don't Panic

An IRS notice doesn't automatically mean you've made a mistake or owe additional taxes.

The IRS sends millions of notices every year for reasons such as:

• Missing information

• Balance due reminders

• Changes made to a tax return

• Requests for documentation

• Payment plan updates

• Identity verification

Many notices can be resolved quickly once you understand what the IRS is asking.

Step 2: Read the Notice Carefully

Every IRS notice includes:

• A notice number (such as CP2000 or LT11)

• The tax year involved

• An explanation of the issue

• Instructions on what to do next

• A response deadline

Take the time to read the entire notice before responding.

Understanding exactly what the IRS is requesting is the first step toward resolving the issue.

Step 3: Compare the Notice to Your Tax Return

If the notice relates to a previously filed tax return, compare the information in the notice with your copy of the return.

Look for:

• Income that may have been omitted

• Math errors

• Missing tax forms

• Changes made by the IRS

• Payment amounts

Sometimes the IRS is correct. Other times, additional documentation may resolve the issue.

Step 4: Don't Miss the Deadline

Most IRS notices include a deadline for responding.

Ignoring the notice may result in:

• Additional penalties

• Interest charges

• Collection activity

• Loss of appeal rights

Even if you disagree with the notice, responding by the deadline is important.

Step 5: Gather Supporting Documents

Depending on the notice, you may need documents such as:

• W-2s

• 1099 forms

• Receipts

• Bank statements

• Prior tax returns

• Business records

Having organized documentation makes resolving the issue much easier.

Common IRS Notices

While there are many different notice types, some of the most common include:

CP2000

The IRS believes income reported by employers, banks, or brokerage firms doesn't match your tax return.

This is not an audit, but it does require your attention.

Balance Due Notices

These notices inform you that taxes, penalties, or interest remain unpaid.

If you can't pay immediately, payment plans may be available.

Identity Verification Notices

Sometimes the IRS simply wants to verify your identity before processing your return or issuing a refund.

Responding promptly helps avoid unnecessary delays.

What If You Can't Pay?

One of the biggest misconceptions is that you shouldn't contact the IRS unless you can pay everything immediately.

That's simply not true.

Depending on your situation, you may qualify for:

• Monthly payment plans

• Temporary collection relief

• Other resolution options

The worst thing you can do is ignore the problem.

Should You Call the IRS Yourself?

Some notices are straightforward enough to handle on your own.

However, you may benefit from professional assistance if:

• You don't understand the notice.

• You disagree with the IRS.

• The amount owed is significant.

• The notice involves multiple tax years.

• You're already behind on filing tax returns.

• You own a business.

Having someone review the notice can help you understand your options before taking action.

What Happens If You Ignore an IRS Notice?

Ignoring an IRS notice rarely makes the problem disappear.

Depending on the notice, the IRS may continue adding penalties and interest, begin collection efforts, or issue additional notices.

Responding early generally provides the greatest number of options for resolving the issue.

We're Here to Help

Receiving an IRS notice doesn't have to become a bigger problem.

At Thompson Tax Services, I help individuals and small business owners understand IRS notices, communicate with the IRS when needed, and develop practical solutions based on their situation.

If you've received a letter from the IRS and aren't sure what to do next, schedule a consultation today. Together, we'll review the notice, explain your options, and create a plan to move forward with confidence.