The envelope arrives on a Tuesday. "Internal Revenue Service" in the corner. Your stomach drops. Before you do anything else: breathe. Most IRS notices are not what your imagination is doing right now.
The IRS sends millions of notices every year. The vast majority are not audits, not enforcement actions, and not even disputes about how much tax you owe. Many are computer-generated mismatches between what was reported on your return and what was reported about you.
Step 1: Find the notice number
Every IRS notice has a code in the upper right or lower right corner — usually starts with "CP" (Computer Paragraph) or "LTR." That code tells you what the notice is. CP2000 means "we found a discrepancy." CP14 means "you have a balance due." CP90 is more serious — "intent to seize."
The IRS website has a search tool where you can plug in the notice code and read a plain-English description. That alone is usually enough to take the edge off.
Step 2: Read what they're actually claiming
Most notices are very specific. They'll say something like: "Your 2024 return reported $48,200 in wages. Form W-2 from your employer reported $52,200. The difference of $4,000 may result in additional tax of $940."
You have three possible situations:
- They're right. A 1099 you forgot. A W-2 you didn't get because you moved. The fix is to agree, pay, and move on.
- They're wrong. They're missing context, double-counting income, or applying a rule that doesn't apply to your situation. The fix is to respond with documentation.
- It's identity theft. Someone filed using your Social Security number. The fix is a different process entirely — Form 14039 and a flagged account.
Step 3: Note the deadline
Every notice has a response deadline, usually 30 or 60 days from the notice date. This is the single most important thing on the page. Missing a deadline turns "we'd like to talk to you" into "we have decided." Penalties and interest accrue, and your appeal options shrink.
Step 4: Don't pay or sign anything you don't understand
If the notice is wrong, paying it just confirms the IRS's version. If you sign Form 9465 (installment agreement) without understanding what you're agreeing to, you may be giving up appeal rights. The IRS will not take advantage of a panicked taxpayer's mistakes — but they will accept them.
Don't call the number on the notice and try to argue your case off the cuff. The agent is recording what you say and will use it.
What we actually do when a client forwards us a notice
Here's the playbook we run on the vast majority of CP2000s, CP14s, and underreporter notices that come across our desk:
- Identify the notice type and the underlying year(s)
- Pull the prepared return for that year and the IRS's transcripts (we can request these directly)
- Reconcile the IRS's claim against the actual return — was the income reported and they missed it? Was it not reported and we have an explanation? Was something miscoded?
- Draft a response with documentation, or — if they're right — a clean payment plan that minimizes penalties
- File the response, track the case, and confirm closure
Most notice resolutions take 30–90 days from response to closure. Many end with the IRS conceding once they see the documentation. The ones that don't usually end with a much smaller balance than the original notice claimed.
If you've got a notice in your hand right now, forward it to us. Don't wait until the deadline is two days away. The earlier we see it, the more options we have.