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Posted by Pat Raskob

IRS Letters: Understanding What IRS Notice Means & What You Should Do

IRS Letters: Understanding What IRS Notice Means & What You Should Do

There is nothing wrong with receiving a letter from the IRS. There are approximately 75 different notices and letters from the IRS. This may be the reminder notice letter 3228 (LT39), or it may also be the IRS sending you the CP12 notice outlining changes to your tax return for an additional fee. The IRS can send letters by regular mail or certified mail. When the IRS sends it by certified mail, it may mean that the alert is about a very urgent issue.

The letters from the IRS very clearly describe why they are contacting the taxpayer and include advice on how to resolve the issue. The IRS typically sends letters or notices if:

  • An error has occurred, and you should receive a higher refund

  • An error or omission occurred in the tax return, and additional fees must be paid

  • The IRS requests additional information on your tax return

How to identify an IRS letter

The IRS assigns a number to each notice that leaves its office. It helps IRS officials track the correspondence of thousands of citizens. Some notices have a CP designation. The revenue agency prints the Computer Paragraph (CP) at the top of the first page of the notification. There is also a corresponding computer paragraph number on the removable side of the page. It helps users keep part of the notice for their records. The IRS typically places the CP number in the notice header at the center and top of the page.

What to do if you receive a letter/notice from the IRS

Most letters and notices from the IRS contain specific instructions to help you complete your tax return. Any notice or letter will require action on your part. After reviewing the email from the IRS, it is essential to compare the information received from the IRS with the information provided during this period.

In case of discrepancy, the IRS must be informed. Where an error has been made, and further payment is required, the mailing and payment may be sent directly to the address given in the notice.

When sending information to the IRS or any business, it is recommended that you keep copies as your personal records.

Different Types of IRS Letters

Some of the more familiar letters and notices from the IRS include:

  • CP88 – Delinquent return refund hold: This is used to inform the taxpayer that the IRS is withholding tax refunds because they have not filed tax returns for a different year.

  • CP14 - First notice of balance due: This is usually the first notice sent after taxes have been filed, and there is still a balance due.

  • CP14IA – Installment agreement account (new notice): The Internal Revenue Service sends this notice instead of CP14 to taxpayers who wish to establish installment arrangements for their tax obligations.

  • CP501 - Reminder - Balance Due: This is the first or second notice you will receive from the IRS if your account has expired.

  • CP503 - Second request notice of Balance Due: You will get this if you have not paid your account balance, you will receive a second notice from the IRS.

  • CP504 - Final Notice and IRS intends to Levy – Balance Due: If the amount is not paid in full, this is the third and final warning before the IRS gets serious and starts looking for assets to garnish.

  • CP523 - Intention to terminate your installment agreement and seize your property: This is the notice that the IRS sends before terminating the installment agreement you have with them. If you do not take any action, the IRS can confiscate your wages, confiscate your bank account or other property. Understand the details of this notice and the actions that can be taken to resolve the issue.

  • CP90 - Intention to seize assets and notice of your right to a hearing: This letter from the IRS is a notice that a charge will be placed on assets, and all retirement benefits, wages, real estate, automobiles, bank accounts, etc. may also be included in the levy.

  • CP297 - Intention to seize property and notify you of the right to a hearing: This notice is similar to CP90 but is sent to your company. This is a warning that the IRS intends to seize the property due to unpaid taxes if no action is taken.

  • LT1058 - Final Notice of Intention to Seize and Notice of Your Right to a Hearing: The IRS will likely make many collection attempts until the taxpayer receives this notice. If you do not take any action within 30 days, the IRS has the right to seize the property or levy the property.

  • LT11 - Intention to seize your property or rights to property: The IRS has received no refunds and intends to seize the assets if no action is taken. The IRS can also file a legal claim against your property.

  • LT16: Call us for your tax return or overdue taxes (newly redesigned): The IRS is trying to collect unpaid taxes from you, or you have not received a tax return due.

  • LT17 – Take action on your remaining balance with our online services (newly redesigned): The IRS wants you to take action on your outstanding balance.

  • LT19 - Pay Your Pending Tax Returns (Newly Revamped): The IRS can take action if you cannot pay your outstanding tax debt.

  • CP22A - Notice of change(s) to income tax return: Based on the information you provided to the IRS, your tax return has changed, and you now owe money.

  • CP3219A and Form 5564 - Notice of Deficiency from IRS: Understand the IRS notice of deficiency. Do I need to sign the attached Form 5564 to accept the new assessment? Know what to do if you don't agree with the warning and what to do if you can't pay your balance now.

  • CP508c - Possible revocation or refusal of passport: You will receive this if the IRS determines that your account is "seriously delinquent." The IRS has provided this information to the State Department. Usually, the Department of State will not renew your passport or issue you a new one after you receive this notice. They can also revoke or impose restrictions on your current passport.

  • CP2000 - Notice of underreported income: The internal revenue service will send this letter when your records do not match what you reported on your tax return. The letter will contain the changes proposed by the IRS. This is not the same as an audit. If you agree with the proposed changes or if you disagree, check off the appropriate response form and send it to the IRS. 

  • IRS Letter 1153 and Form 2751: Proposed Assessment of the Trust Fund Recovery Penalty: The IRS sends this letter to people about the penalty for recovering the trust fund. The IRS typically sends this letter when a business refuses to pay payroll taxes and the IRS has decided to hold you liable for the taxes owed. Form 2751 is an attached form agreeing to the assessed amount.

  • IRS Audit Letters: The IRS has a variety of letters it sends out for audits. The IRS will send different types of notices depending on how the IRS intends to verify your tax return. Here are the details of some of the IRS audit letters.



Pat Raskob
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