What to Do If You Receive an IRS Notice or Letter

Fear is a psychological response of the body induced by a perceived threat or danger that triggers physical responses such as sweaty palms and an increased heart rate. It's also the standard initial response to a letter from the IRS. While fear is a completely normal reaction, here are three steps every taxpayer should follow if they receive an IRS letter.

  1. First, don't panic! The IRS sends out millions of letters and notices to taxpayers annually. They cover a broad range of subjects from errors on your tax return, to verification of your identity and reminders that you may be eligible for certain credits like the Earned Income Tax Credit. Many of these IRS letters come out shortly after tax season ends - starting about now. Many times, the IRS notices are partially or totally incorrect, and you should verify all the information on the letter against your tax return.

  • Make sure you read the instructions associated with the IRS letter or the IRS notice. The IRS may only need some specific information to further process your tax return, or they may just need to verify your identity. If you have questions, you should contact the number listed on the notice. Make sure you note the agent's name and badge number as well as the information they provide when you call with your questions.
  • If you agree with an IRS assessment, sign the letter and send the check. If you disagree fully or partially, send any additional forms and an explanation supporting your disagreement. If you owe the IRS, there may be penalties and interest on any balance due. The penalty and associated interest are generally included in the notice of error. However, if you disagree with the IRS assessment and are able to show a lower amount of tax owed, the IRS will bill you for any associated penalty and interest. If you are unsure if the notice is accurate, you should get professional help. The last thing you want to do is simply pay an IRS notice just to make it go away. Only pay if it is correct and you owe. If not sure, find someone to help you.

  • Make sure you keep a copy of any notices and your responses in your files for the tax year in question. It is a good idea to see a tax professional with a copy of your letter and your tax papers for the year in question.
  • An IRS notice does not have to cause widespread fear and panic. Millions of taxpayers get IRS notices saying there may be an issue or error and you may owe additional tax, including penalties and interest. Just because you get a notice does not mean that it is correct. You may just need to provide a bit more information and all will be fixed.

    In any case do not ignore the notice as it will not just go away. Ignoring a notice will only make matters worse.

    It's also important to remember that the IRS does not send email letters, email notices, or electronic internet requests for information. If you receive an email from the IRS, do not respond. Instead forward the email to phishing@irs.gov.