Got a letter from the IRS? Read this first.
Most notices are routine. Here is how to read yours and what to do before you call anyone.
This guide is general information, not tax or legal advice. Always confirm tax decisions with your CPA or tax professional.
Receiving a letter from the IRS is stressful, but most notices are routine and manageable if you act promptly.
Step by step
- Don't panic. Most IRS notices are not audits. Many are simple requests for information or math corrections.
- Read it carefully. Note the notice number in the top-right corner, the tax year it references, and the response deadline.
- Loop in your bookkeeper and tax professional before calling the IRS. They can often explain what triggered it.
- Do not ignore it. Ignoring a notice lets interest and penalties compound, and things can escalate.
- Respond by the deadline with all supporting documentation.
Common notices
- CP2000. Income on your return does not match what was reported to the IRS, often a missing 1099. Usually requires a response or an amended return.
- CP501 / CP503 / CP504. Balance-due notices at escalating urgency. Review with your tax professional.
- CP11. The IRS changed your return and believes you owe more. Review carefully, because sometimes they are wrong.
- LT11 / Letter 1058. Final notice before levy. Act immediately.
Keep every IRS notice. Do not throw them away. And if you are a True North client, send it to us right away. We will help you figure out what it means and what to do next.
Reading this and thinking about your own books? Get a free look. It is free, and there is no catch.
Questions we get about this
Does an IRS notice mean I am being audited?
Usually not. Most notices are requests for information or math corrections. Audits arrive as a specific audit letter and are far less common than people assume.
Should I call the IRS right away?
Loop in your bookkeeper and tax professional first. They can often tell you what triggered the notice, which makes the call much shorter and keeps you from agreeing to something before you understand it.
What if the IRS is wrong?
It happens, particularly on CP11 and CP2000 notices. That is exactly why you review the notice against your own records before responding, rather than just paying what it says.
Want someone else to handle this?
Send us the short version of what is going on. The first look at your books is free, and you will get a straight answer on what it would take to fix.
Get a free look at your booksCall or text: 303-775-5554