How to respond to an IRS notice

If you receive a letter this year from the IRS, don’t be alarmed. Many of the letters or notices are routine, automatically generated, and can easily be resolved. They typically fall into one of the following categories:

• You have a balance due.
• The IRS has a question about your return.
• Something on your return was changed.
• You are due a larger or smaller refund.
• You need to verify your identity.
• Additional information is requested.
• There is a delay in processing.

The following are recommended guidelines how to address the letters or notices.

Read

Each notice or letter contains a lot of valuable information, so it’s very important that you read it carefully. The IRS has a standard form letter for each type of tax problem, which will include a title, summary of the problem identified, tax year, notice date and employer identification number. There is also an identifier in the top corner of the notice/letter that is either a “CP” followed by a number (for a notice) or “LTR” followed by a number (for a letter).

• Examples: CP161 refers to an “Unpaid Balance Due” or LTR 672C refers to a “Payment(s) Located and/or Applied.”
• This identifier allows you to quickly identify the issue and your options for resolving it. If you’d like to do more research on your own, this is the identifier you should use in your search on the IRS’s website.

Respond

If your notice or letter requires a response by a specific date (typically it is 30 days), there are two main reasons you’ll want to comply:

• to minimize additional interest and penalty charges.
• to preserve your appeal rights if you don’t agree.

Pay