Eight Things to Know about IRS Notices and Letters

Eight Things to Know about IRS Notices and Letters

Each year, IRS sends millions of notices and letters to taxpayers for a variety of reasons. Here are eight things to know in case one shows up in your mailbox.

Don't panic. You often only need to respond to take care of a notice.

There are many reasons why the IRS may send a letter or notice. It typically is about a specific issue on your federal tax return or tax account. A notice may tell you about changes to your account or ask you for more information. It could also tell you that you must make a payment.

Each notice has specific instructions about what you need to do.

You may get a notice that states the IRS has made a change or correction to your tax return. If you do, review the information and compare it with your original return.

IRS Letter CP501:

You have a balance due (money you owe the IRS) on one of your tax accounts.

IRS Letter CP503:

We have not heard from you and you still have a balance due.

IRS Letter CP504:

You have an unpaid amount due on your account. If you do not pay the amount due immediately, the IRS will seize (levy) your income tax refund and apply it to pay the amount you owe.

IRS LT11 (Letter 1058):

Final Notice prior to levy; your right to a hearing. This is more commonly referred to as a Collection Due Process Notice of Intent to Levy. It lets a taxpayer know s/he may request a hearing before an Appeals Officer to request, for example, an offer in compromise, innocent spouse relief, penalty abatement request, and other collection alternatives. The taxpayer may contest the underlying tax if s/he did not receive notice of a proposed assessment.

If you agree with the notice, you usually don't need to reply unless it gives you other instructions or you need to make a payment.

If you do not agree with the notice, it's important for you to respond. You should write a letter to explain why you disagree. Include any information and documents you want the IRS to consider. Mail your reply with the bottom tear-off portion of the notice. Send it to the address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.

Keep copies of any notices you receive with your other tax records.

NOTE: The IRS sends letters and notices by mail. IRS does not contact people by email or social media to ask for personal or financial information.

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