What to Do (and Not Do) When the IRS Sends You a Notice

Getting an envelope from the IRS is unsettling, but a notice is not automatically bad news. Many notices are routine: they may confirm a small math correction, request a missing form, or simply tell you that your refund is delayed. The first step is always the same. Read the notice in full, top to bottom, before you do anything else.

Every IRS notice includes three critical pieces of information: the notice number (usually in the top right corner, like CP2000 or CP504), what the IRS believes is wrong, and a deadline to respond. The notice number tells you exactly what kind of issue you are dealing with, and looking it up on IRS.gov gives you a reliable description of what the IRS wants.

Whatever you do, do not ignore it. Almost every notice has a response deadline, and missing it usually removes your options rather than the problem. Interest and penalties keep accruing on unpaid balances, and some notices, like a Notice of Deficiency, start a 90-day clock after which the IRS can assess the tax without further discussion.

Also resist the urge to call the number on the notice immediately and argue your case on the spot. Phone agents see only a summary of your account, and anything you say becomes part of your file. If the notice involves a proposed change to your return, a balance you dispute, or penalties, it is worth having a professional review it first.

Bring the notice, the tax return it relates to, and any supporting documents to your CPA. In many cases we can resolve the issue with a written response, and you never have to speak with the IRS at all. If the notice is correct and you do owe, we can often reduce or abate the penalties and set up a payment arrangement that fits your budget.

A notice is a conversation starter, not a verdict. Handled promptly and with the right documentation, most IRS notices close quietly. Handled by silence, they rarely do.