I got an IRS notice — what do I do first?
An IRS notice states what the IRS believes is wrong, what it proposes to change, and when a response is due. Read the notice code and the deadline first, then compare the proposed change to the return and the records — many notices are matching errors that one document resolves. Ignoring a notice converts a question into an assessment. A CPA or enrolled agent can respond on the taxpayer's behalf.
Key points
- Every IRS notice states what the IRS believes is wrong, what change it proposes, and the date by which a response is due.
- The notice code printed on the page identifies the notice type, and the response deadline determines which options remain open.
- Many notices are matching issues where a Form 1099, W-2, or brokerage statement does not agree with the return, and one document often resolves them.
- Letting a notice deadline pass turns a proposed change into an assessed balance and sharply narrows the taxpayer's options.
- A CPA or enrolled agent can respond to a notice on the taxpayer's behalf under a signed Form 2848 power of attorney.
What should you read first on an IRS notice?
An envelope from the IRS raises the pulse, but most notices are more ordinary than they feel, and the worst outcomes come from panic or avoidance rather than from the notice itself. The right response is calm and procedural, and it starts with reading the notice properly.
Every notice tells you three things: what the IRS believes is wrong, what change it proposes as a result, and by when you must respond. Two details matter most at the outset. The first is the notice code, usually printed in the upper corner, which identifies exactly what kind of notice it is: a proposed adjustment such as a CP2000, a request for a missing form, a balance due, or an identity verification. The second is the deadline, because your rights and options depend heavily on responding within it. Read those two first.
How do you check whether the notice is correct?
With the type and deadline in hand, compare the proposed change against the return as filed and the underlying records. A large share of notices are matching issues: the IRS received an income document, a Form 1099, a W-2, or a brokerage statement, that does not line up with what appeared on the Form 1040.
Often the notice is correct and something was genuinely omitted. Just as often it is wrong, because the IRS double-counted an item, ignored the cost basis on a securities sale, or attributed income that was reported on a different line or a different return. Either way, the resolution is frequently a single document or a short explanation, not a crisis. The comparison tells you which situation you are in.
What happens if you ignore an IRS notice?
A notice is, at this stage, a question or a proposal. You still have the right to disagree and to supply information. Let the deadline pass in silence and the proposal hardens into an assessment: the change becomes official, the balance becomes collectible, and options narrow sharply, sometimes to far more expensive remedies. For a proposed deficiency, the next letter is a statutory notice of deficiency under section 6213, and after that the only way to contest the amount before paying is a petition to the Tax Court within its own fixed window.
Ignoring a notice is the single most common way a manageable matter becomes a serious one. If more time is needed, many notices allow a request for an extension, but the request has to be made before the clock runs out.
How should you respond, and when does a professional need to handle it?
Respond in writing, address exactly what the notice raises, and include copies, never originals, of the documents that support the position. Keep a record of what was sent and when, and expect processing to take time, so patience after a timely response is normal. If the notice is correct and tax is owed, responding promptly opens the door to a payment plan rather than escalation.
A CPA or an enrolled agent can respond on the taxpayer's behalf once a Form 2848 power of attorney is signed. For anything beyond a straightforward matching fix, a proposed adjustment you disagree with, an examination, or a large balance, having a professional read the notice and frame the response is worth it. The honest limit is that a professional cannot revive a deadline that has already passed or make a correct notice go away; the value is in responding well while there is still room to do so, which means bringing the notice to an advisor the week it arrives.
Related strategies
People also ask
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Sources
Related guides: cfo
Mena Hemaia, CPA, CIA
Chief Executive Officer, Accountack — West Palm Beach, Florida
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