The IRS mails millions of letters every year to taxpayers for a variety of reasons. Here are some tips on how to handle an IRS notice or an IRS letter.

Don’t Panic & Don’t Ignore

First, don’t panic. Also, don’t ignore the notice. It’s not just going to go away. Read it right away. Simply responding will take care of most IRS letters and notices.

IRS notices are usually about a specific issue on a tax return for a prior year—for example, you made a math error or forgot to report some income. The notice may ask you for more information or tell you that you must make a payment to the IRS. On the other hand the notice may contain the good news that you are owed a refund.

The notice will have specific instructions on what you should do. Read them carefully.

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What’s In An IRS Notice?

The notice may provide that the IRS has made a change or correction to your tax return. Be sure to compare what the IRS did with your original return to see if it makes sense.

If you agree with the notice, you usually don’t need send a reply to the IRS unless the notice instructs you to do so or you need to make a payment. Follow the instructions in the Notice on how to send in your payment.

If you do not agree with the notice, it’s important for you to respond in writing to the IRS. Write a letter clearly explaining why you disagree with what the IRS said in the notice. Mail the letter with the bottom tear-off portion of the notice. It will take the IRS at least 30 days (and likely more) to get back to you.

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Avoid Being Scammed

If you have questions about the notice, call the phone number in the upper right-hand corner of the notice. Be sure to have a copy of your tax return and the notice with you when you call—you’ll likely need the information on them.

The IRS and its authorized private collection agency sends all notices by postal mail. It never contacts taxpayers by phone or email to ask for personal or financial information or demand payment. If you receive such a phone call or email, it’s a scam.

Keep all IRS notices you receive with your tax records. For more information about IRS notices, visit the Understanding Your IRS Notice page on the IRS website. Also, see IRS Publication 594, The IRS Collection Process.

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Stephen Fishman

Stephen Fishman

Stephen Fishman is a self-employed tax expert and regular contributor to MileIQ. He has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for entrepreneurs, independent contractors, freelancers and other self-employed people. He is the author of over 20 books and hundreds of articles, and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Visit Fishman Law and Tax Files for more information on his work.
Stephen Fishman