What to Do When You Get an IRS Notice: A Step-by-Step Guide

Most IRS notices look terrifying but are routine — a recalculation of a number, a missing form, a question about a deduction. A few are serious, and almost all of them have a response window that starts running the day the letter is dated. Here is what to do in the first 48 hours, regardless of which notice you received.

Step 1: Do not panic, and do not pay yet

The single worst response to an IRS notice is to immediately mail a check for whatever amount it lists. Many notices are based on incomplete information — the IRS computer matched a 1099 you received without knowing it was already reported under your business name, for example. Pay first, fight later is usually the more expensive path. Read the notice fully before you do anything.

Step 2: Identify the notice number

Every IRS notice has a number in the upper right corner, formatted as CP## or LT##. The number tells you exactly what the IRS is asking. A CP2000 means the IRS thinks income on your return does not match what was reported to them — these are usually negotiable. A CP14 is a balance-due notice for tax already assessed. A CP504 means they are about to levy your assets, and you have 30 days. Google the exact notice number to understand the stakes before you do anything else.

Step 3: Note the response deadline

The deadline is on the notice, usually 30 or 60 days from the date printed at the top — not the date you received it. Calendar the deadline immediately. If you need more time, you can often request an extension by calling the number on the notice, but you must do it before the deadline passes. Missing the deadline can convert a negotiable issue into a final assessment.

Step 4: Pull the underlying documents

Before you respond, gather: the tax return for the year in question, all source documents (W-2s, 1099s, K-1s) for that year, and any prior IRS correspondence about the same issue. If you cannot find the return, you can request a free transcript at IRS.gov — that shows you what the IRS has on file, which is sometimes different from what you actually filed.

Step 5: Decide if you need help

Some notices are easy to handle yourself — a CP2000 for a missing 1099 of $200 is a one-page response and a check. Others are not. Get professional help when: (1) the dollar amount is meaningful, (2) the notice mentions audit, examination, levy, or lien, (3) the underlying issue involves business income or self-employment tax, (4) you do not understand what is being asked, or (5) you have unfiled returns from prior years that the notice references.

Step 6: Respond in writing, by certified mail

Whatever you send to the IRS, send it certified mail with return receipt. The IRS loses correspondence regularly, and "I mailed it" is not a defense. Keep a copy of everything you send and write the notice number on every page. If the notice provides an online response option (some do now), use it and save the confirmation.

What to never do

Never ignore an IRS notice. Penalties and interest compound, and the IRS has powerful collection tools — wage garnishment, bank levies, and federal tax liens — that they will eventually use. Never call the IRS without a copy of your return in front of you. And never agree to a payment plan on the phone without understanding the long-term cost; sometimes a one-time payment, an Offer in Compromise, or first-time penalty abatement is cheaper than the installment agreement the agent will suggest first.

If you just received a notice and are not sure how to read it, send it to us — we can review it in 30 minutes and tell you honestly whether it is something you can handle yourself or whether you need representation. Book a free 15-minute call or upload the notice through our contact form.