IRS Letters: Understand What Your IRS Notice Means & What to Do

irs letterNothing can make your blood run cold than receiving a letter from the IRS. The registered letter arrives in your box but there are around 75 different notices and letters from the IRS. It could be Letter 3228(LT39) Reminder Notice letter or it may even be the IRS sending you Notice number CP12 which outlines Changes to Tax Return, Overpayment. In each of the 75 options for letters or notices from the IRS it is important to remember not to panic.

Letters from the IRS describe quite clearly what the issue is about. The IRS usually sends out letters or notices if:

  • There was an error or omission on your tax return and additional tax payment is required
  • There was an error and you are due a greater refund
  • The IRS requires additional information regarding your tax return

How to Identify the Letter from the IRS

The IRS assigns a number to every notice that leaves their office. This helps IRS employees track correspondence from thousands of citizens. Some notices are highlighted with a CP designation. The CP (Computer Paragraph) is printed at the top or the first page of every notice sent. There is also a corresponding CP number on the removable portion of the page. This is to permit users to retain a portion for their records.

The CP number is located in the header of the notice, at the top and center of the page.

What To Do If You Receive A Letter From The IRS

Most letters from the IRS contain specific instructions to help complete your tax return. Each notice or letter will require some action on your part. After reviewing the letter it is important to compare the information received from the IRS to the information that you provided to them during the period in question.

If there is a discrepancy, then this should be brought to their attention. When an error has been made and additional payment is required direct correspondence and payment can be submitted directly to the address on the notice.

When submitting any information to the IRS or to any company for that matter, it is good practice to keep copies for your own records.

Different Types of Letters from the IRS

Some of the more common letters from the IRS include:

CP 88 – Delinquent Return Refund Hold

This notice is used to notify the taxpayer that the IRS is holding their tax refund because they have unfiled tax returns for a different year.

CP 501 – Reminder Notice – Balance Due

This is the first notice that you will receive from the IRS if you have an overdue account.

CP 503 – Second Request Notice – Balance Due

If you have not paid the balance of your account you will receive a second notice.

CP 504 – Final Notice & IRS Intends to Levy – Balance Due

If the amount is not paid in full this is the 3rd and final notice before the IRS gets serious and start searching for assets to levy.

CP 90 – Intent to Seize Assets and Notice of Your Right to a Hearing

This IRS letter is a notification that a levy will be put against assets and any retirement benefits, salaries, real estate, automobiles, bank accounts etc can also be included in the levy.

CP 297 – Intent to Seize Assets and Notice of Your Right to Hearing 

This notice is similar to the CP 90, but it is sent to your business. This is a notification that due to unpaid taxes the IRS intends to levy assets if no actions are taken.

LT 1058 – Final Notice of Intent to Levy and Notice of Your Right to Hearing

The IRS has likely made numerous attempts to collect by the time the taxpayer receives this notice. If no action is taken within 30 days, the IRS has the right to levy or seize assets.

LT 11 – Intent to Seize Your Property or Rights to Property

The IRS hasn’t received any payment for overdue taxes and they intend to seize assets if no action is taken. The IRS may also place a lien on property.

CP 22A – Notice of Change(s) to Your Tax Return

Based on the information you provided the IRS, your tax return was changed and you now owe money

IRS Letter 1153 & Form 2751: Proposed Assessment of the Trust Fund Recovery Penalty

The IRS sends this letter to individuals about the Trust Fund Recovery Penalty. Typically, the IRS sends this letter when a business has refused to pay the payroll taxes, and the IRS has decided to hold you responsible for the debt. Form 2751 is an enclosed form agreeing to the assessed amount.