IRS notices are intimidating, and we’re here to help you understand what you need to do. When many people think of the IRS, they often imagine a person in a black suit showing up at their front door and hauling them in for an interrogation.
Unless you’re involved with some truly questionable things, this won’t be the case for you.
A letter in the mail is the main way the IRS will notify you of your tax status. For the majority of Americans, these are simple mistakes that can easily be corrected.
What Is An IRS Notice?
An IRS notice is exactly what it sounds like—it’s an official document sent by the IRS that signifies that they encountered some issue with your taxes. More often than not, the issue has to do with a federal tax issue.
We will mainly be talking about CP codes in this article. CP stands for computer-generated notices.
How To Check If You Have An IRS Notice?
An IRS notice will always be sent to you via paper mail. Additionally, you can always check your federal tax information on the IRS’s official website.
What’s A Notice Date
On your IRS notice, you’ll see a notice date in the top right-hand corner. This is the date that the notice was issued.
Depending on the notice code, you have 30 or 45 days to respond.
What To Do When You Receive An IRS Notice?
When you receive a notice in the mail, the IRS has recommendations on what to do and not to do. Here’s the summarized list of steps.
The first step is not to panic and to read the letter thoroughly. Take note of the notice code in the top right-hand corner. Remember that the IRS does not contact you via phone, text message, social media, or phone calls. If an alleged IRS employee reaches out to you in either of these ways, it’s a scam!
Then, you need to understand what the notice means and what you need to do. Unless you owe money to the IRS, there’s usually no need to reply or call. If you do call, the IRS’s official number is provided in the top right corner.
Make sure to respond within the timeframe allowed for the notice. If you receive multiple notices, make sure to complete each notice.
If you disagree with the IRS, mail a letter to the contact stub included with the notice. Here’s an article detailing more about how to appeal an IRS notice.
What Happens If I Don’t Do Anything?
Ignoring the IRS is not a good choice to make.
If you ignore the IRS notice, you’ll have tax and interest penalties stacked against you. In other words, the more you put it off, the more you’ll end up paying! Depending on the amount you owe, the IRS could take even more drastic measures, such as canceling your passport, garnishing your wages, or even putting out a lien on your property!
8 Most Common IRS Notices (And What They Mean)
Here are 8 of the most common IRS notices. Don’t worry, they’re not as complicated as they sound!
CP2000 means that there’s a discrepancy between the information the IRS has on file and what you reported on your tax return.
Oftentimes, if you get this notice, then you probably just forgot to include additional income, such as a contract 1099 form or something along those lines.
CP14 means that the IRS believes you owe them money. If you receive this notice, the IRS will include instructions on how to pay the debt along with a deadline.
CP90 is an official notice that the IRS will place a levy against your income or assets.
If you get this notice, that means you owe the IRS money and you haven’t paid it back by the due date and you received multiple notices from the IRS requesting payment. So, this shouldn’t blindsight you.
The CP90 Tax Levy informs you that you have a right to a hearing and that your assets will be levied 30 days from the received date.
CP521 is a render that you have a payment due on your installment plan. An installment plan is a payment plan the IRS offers to pay off the debt you owe to the IRS.
CP504 is a final reminder that the IRS intends to levy your assets and income. This notice is also known as a Notice of Intent to Levy.
The CP504 comes after the CP90.
CP88 means that your tax refund for a certain year is being held until you file your tax return for the current year.
If you received this notice, the IRS believes you owe them money for the current year. If you don’t file a tax return, the IRS may calculate your tax for you.
CP501 is a friendly reminder that the IRS sends you when you owe the IRS money. Since this is a reminder, you should have gotten prior notice that you have a balance on one of your tax accounts.
LT11 is a notice that the IRS intends to seize your assets. If you get this notice, that means you’ve ignored multiple letters from the IRS and you owe money to the IRS.
As a result, the IRS intends to seize your assets to recover the debt. Note that this is simply a notice of what the IRS intends to do. You still have time to get your finances and debt in order with the IRS.
These were 8 of the most common IRS notices you could receive. If you received any of these notices, make sure to handle them as soon as possible.