If a letter from the IRS just arrived, the way to respond to an IRS notice is to find the notice or letter number printed on it (something like CP14, CP2000, or Letter 5071C), read what the agency is proposing or asking, check its figures against your own return and records, and then either pay, agree, or dispute in writing before the deadline on the letter. Most notices give you 30 days. Miss that window and penalties, interest, or collection actions get much harder to unwind.
Confirm the Letter Actually Came From the IRS
Before you do anything, make sure the letter is real. The IRS reaches out by mail first, never by email, text, or social media, and it does not call demanding immediate payment or threatening arrest.1Internal Revenue Service. Ways to Tell if the IRS Is Reaching Out or if It’s a Scammer
A genuine notice shows your name, address, Social Security number or ITIN, the tax year at issue, and a specific notice or letter number. You can verify it by logging into your IRS Online Account at irs.gov, where digital copies of notices appear in your file.2Internal Revenue Service. Online Account for Individuals If something feels off, call the IRS using the number listed on irs.gov, not any number printed on a letter you’re suspicious of.
Find the Notice Number and What It Wants
The notice number in the top right corner tells you what the letter is about. A few of the most common:
CP14 and Its Follow-Ups (Balance Due)
The CP14 is usually the first notice you receive when the IRS calculates that you owe tax after filing. It shows the total due with interest and penalties, and a date to pay by.3Internal Revenue Service. Understanding Your CP14 Notice If you don’t pay, the IRS sends increasingly urgent reminders: CP501, then often CP503, then CP504.4Internal Revenue Service. Understanding Your CP501 Notice The CP504 is titled “Notice of Intent to Levy” and warns that the agency can levy your state tax refund and move toward levying bank accounts and wages if you don’t pay immediately.5Internal Revenue Service. Understanding Your CP504 Notice
CP2000 (Income Doesn’t Match)
A CP2000 means income or payments reported by an employer, bank, or other third party don’t match what’s on your return.6Internal Revenue Service. Understanding Your CP2000 Series Notice Common causes: a forgotten 1099, unreported bank interest, dividends from a brokerage account. The notice proposes a specific tax adjustment and gives you 30 days to respond, or 60 days if you’re outside the country.7Internal Revenue Service. Topic No. 652, Notice of Underreported Income – CP2000 This is not an audit. It’s an automated comparison, and it’s often resolved with one response.
Letter 4464C (Refund Being Reviewed)
Letter 4464C tells you the IRS is holding your refund while it verifies your return, often because of questionable credits or withholding that doesn’t match employer records.8Internal Revenue Service. IRM 25.25.5 – General Correspondence Procedures The letter itself tells you whether the IRS needs anything from you or simply needs more time.
Letter 5071C and the CP5071 Series (Identity Verification)
A CP5071 series notice, including Letter 5071C, is an identity verification request. A return was filed under your Social Security number and the IRS wants to confirm you filed it. If you did, verify at irs.gov/verifyreturn using your tax records. If you didn’t, follow the instructions on the notice to report identity theft.9Internal Revenue Service. Understanding Your CP5071 Series Notice
Read It, Then Compare It to Your Records
Read the entire notice before doing anything. Then pull your copy of the return for the year it references, plus the W-2s, 1099s, receipts, and bank statements behind the numbers. Most notices propose a specific change and show the dollar amount. Your job is to work out whether the IRS is right, partly right, or wrong.
If you agree, you usually don’t need to send a formal response. Pay the amount by the due date shown and the matter closes.10Internal Revenue Service. Understanding Your IRS Notice or Letter If you can’t pay in full, pay whatever you can by the date on the notice. Partial payment reduces the interest and penalties that keep building on the rest.
If you disagree, respond in writing with documentation. Most notices include a response form or tear-off stub with boxes for agreeing or disagreeing. Fill it out, attach copies (never originals) of supporting documents, and return it within the deadline printed on the notice. For a CP2000, that might mean a corrected 1099 from the issuer, proof you already reported the income on a different line, or a written explanation of why the proposed change is wrong.
How to Send the Response So You Can Prove It Arrived
The IRS Document Upload Tool is the fastest option. You upload scanned documents or photos as PDFs, JPGs, or PNGs through a secure portal, using the access code or notice number on your letter, and you get electronic confirmation of receipt.11Internal Revenue Service. IRS Document Upload Tool That confirmation matters. The most common bad outcome in these disputes is the IRS saying it never received your response.
Faxing works if a fax number is provided on the notice. Keep the transmission confirmation. If you mail the response, use certified mail with return receipt requested through USPS. That receipt is your legal proof of timely filing if the IRS later claims your response was late or missing.
Processing typically runs 30 to 90 days after submission, sometimes longer during peak season. If the IRS accepts your documentation, you’ll receive a follow-up notice (for example, CP2005 for a resolved income mismatch) confirming the change. If it needs more time, it usually sends an interim notice explaining the delay.
The One Deadline You Cannot Miss: The 90-Day Letter
The Notice of Deficiency, sometimes called the “90-day letter,” is the most consequential notice the IRS sends. It’s a formal legal document stating that the IRS has determined you owe additional tax, and it starts a strict 90-day countdown (150 days if you’re outside the United States). Within that window you can file a petition with the U.S. Tax Court and challenge the determination without paying the disputed amount first.12Internal Revenue Service. Understanding Your CP3219N Notice
Miss those 90 days and the IRS assesses the tax. After that, your only route to challenge it is to pay the full amount and then sue for a refund in federal district court or the Court of Federal Claims. That path is much more expensive and slower.
Filing a Tax Court petition costs $60, and the court can waive the fee if you can’t afford it.13United States Tax Court. Court Fees You submit the petition with a complete copy of the IRS notice, a Statement of Taxpayer Identification Number (Form 4), and a Request for Place of Trial (Form 5). Don’t attach returns or evidence to the petition itself; those come later.14United States Tax Court. Guidance for Petitioners: Starting a Case If you get this notice, talk to a tax professional even if you plan to handle the case yourself.
If You Can’t Pay the Full Balance
Owing money you don’t have is stressful, but avoidance is the worst option. Getting into a formal arrangement stops the escalation and cuts the penalty rate.
Payment Plans
A short-term payment plan gives you up to 180 days to pay in full, with no setup fee regardless of how you apply. A long-term installment agreement lets you make monthly payments. Setup fees for long-term plans depend on how you apply and pay:15Internal Revenue Service. Payment Plans; Installment Agreements
- Direct debit from a bank account: $22 online, $107 by phone or mail.
- Other payment methods: $69 online, $178 by phone or mail.
- Low-income taxpayers: setup fees are waived for direct debit plans and reduced to $43 for other methods.
Once you’re on an approved installment agreement, the failure-to-pay penalty drops from 0.5% per month to 0.25% per month, which adds up over a multi-year plan.16Internal Revenue Service. Failure to Pay Penalty
Offer in Compromise
An offer in compromise settles your tax debt for less than the full amount if paying in full would create genuine financial hardship. The IRS looks at your income, expenses, asset equity, and ability to pay.17Internal Revenue Service. Offer in Compromise You must be current on all tax filings and not in an open bankruptcy to apply. The application fee is $205 (waived for low-income filers), plus either a 20% down payment with a lump-sum offer or the start of monthly payments for a periodic-payment offer. The IRS rejects the majority of offers. If it believes you can pay through an installment plan, it will deny the offer.
Currently Not Collectible
If paying anything at all would leave you unable to cover basic living expenses, the IRS can place your account in Currently Not Collectible status. That halts most collection activity, though penalties and interest keep accruing and the IRS may still file a tax lien. You’ll need to document the hardship on Form 433-F or Form 433-A.18Internal Revenue Service. Temporarily Delay the Collection Process If your income later improves, collection resumes.
Ask About Penalty Relief
Penalties aren’t fixed. First-time penalty abatement is the easiest path. If you filed the same type of return for the three prior years with no penalties (or had any penalties removed for an acceptable reason), you can request abatement by calling the number on your notice. You don’t need to submit supporting documents or even use the phrase “first-time abatement.” The IRS reviews your compliance history and applies the relief if you qualify.19Internal Revenue Service. Administrative Penalty Relief Many people pay penalties they didn’t have to simply because they didn’t know to ask.
Reasonable cause relief is available when something beyond your control prevented compliance: serious illness, a natural disaster, the death of a close family member, or destruction of your records. The bar is higher and you’ll need documentation. Request it by phone or by sending a written explanation with Form 843.
Getting Someone to Handle It for You
To let a tax professional deal with the IRS on your behalf, file Form 2848, Power of Attorney and Declaration of Representative. It authorizes an attorney, CPA, or enrolled agent to receive your confidential tax information and act on your account for the specific tax years and issues you list.20Internal Revenue Service. Instructions for Form 2848, Power of Attorney and Declaration of Representative Vague authorizations like “all years” get rejected. If you file by mail or fax, you must sign by hand; the IRS does not accept digital or typed signatures on mailed forms. You can also submit online at IRS.gov/Submit2848 with an electronic signature.
Expect hourly rates from $100 to $400 for an enrolled agent or CPA who handles these regularly. For an offer in compromise or a Notice of Deficiency, that expertise usually earns its cost.
When the Normal Channels Aren’t Working
The Taxpayer Advocate Service is an independent organization inside the IRS that helps taxpayers whose problems aren’t being resolved through normal channels. TAS accepts cases based on specific criteria, most commonly:21Internal Revenue Service. Taxpayer Advocate Service (TAS) Case Criteria
- Economic harm from IRS action or inaction, such as a bank levy that prevents you from paying rent or utilities.
- An immediate threat of lien filing, levy, or property seizure.
- Unreasonable delay: your issue has gone more than 30 days beyond normal processing time, or the IRS missed a promised response date.
- Substantial professional fees you’ll incur if the issue isn’t resolved.
Contact TAS at 877-777-4778 or through a local Taxpayer Advocate office. TAS can intervene to stop enforcement while your case is reviewed.
What Ignoring the Notice Costs
Ignoring a notice doesn’t make it go away. The IRS follows a predictable escalation, and each step gets more expensive.
The failure-to-pay penalty starts at 0.5% of your unpaid tax for each month or partial month the balance stays outstanding, capping at 25%.16Internal Revenue Service. Failure to Pay Penalty On top of that, interest accrues at a rate the IRS sets each quarter (the federal short-term rate plus three percentage points); for the second quarter of 2026 that rate is 7% for individual underpayments.22Internal Revenue Service. Quarterly Interest Rates Interest compounds daily.
After the CP504, the IRS sends a formal Notice of Intent to Levy giving you 30 days to pay or request a Collection Due Process hearing before it starts seizing wages, bank accounts, or other property.23Taxpayer Advocate Service. Notice of Intent to Levy The agency can also file a federal tax lien, which damages your credit and creates problems if you try to sell your home or borrow money.
If your total unpaid tax debt (including penalties and interest) exceeds $66,000, the IRS certifies the debt to the State Department, which can deny your passport application or revoke an existing passport. That threshold adjusts annually for inflation.24Internal Revenue Service. Revocation or Denial of Passport in Cases of Certain Unpaid Taxes Even at that point, getting into an installment agreement or offer in compromise reverses the certification. The sooner you respond to whatever notice is in your hand, the fewer of these steps you have to unwind.