An envelope in your mailbox from the IRS, other than the expected refund check, will usually cause some concern. No one particularly wants to get correspondence from the IRS, and that is understandably so.
If you do have a notice from the IRS, you may have some difficulty understanding what it is or the reason for the notice to be issued. Each notice that the IRS sends is specific to an account related issue, and generally has to do with an anticipated tax balance, an audit, or an adjustment of some sort to an item reported on your tax return.
The IRS does not send out general solicitations, nor do they ask that you fill out personally identifiable information so that they may ‘estimate’ your refund. They do not advertise or direct-mail taxpayers with blanket information regarding new tax credits or tax law changes. Any such correspondence should be considered junk mailings and or fraudulent.
If you do have a legitimate notice from the IRS, read through it carefully. Each notice will advise you of the reason for the letter, and will have information as to how to respond, as well as a contact telephone number. It is not necessary to ask for the person who signed the letter; these are electronic form signatures only and do not mean that anyone is personally awaiting your response.
Note the number of the notice, which you will find in one of the corners of the letter. You may see a ‘CP’, which stands for Computer Paragraph, and then a number. These are notices sent out systemically with computer generated paragraphs.
You may also see an ‘LT’ (Letter) followed again by a number. These letters are generally sent out by the IRS Compliance Division, which may indicate that you have a tax balance or overdue tax return that has been assigned for IRS collection.
Other notices start with a number and then end with a ‘C’. These are IRS Correspondex System letters; they are also account related.
The following is a list of common IRS letters and what they are used for:
CP11 – This notice is sent to advise a taxpayer that during the original processing of their tax return, a change was made. Common changes include correcting a computation error or denying a certain line item on the return.
CP91 – This is a Final Notice that is sent to a taxpayer who is receiving Social Security income. This notice advises them that a garnishment on their benefits is about to begin, and to contact the IRS immediately to prevent this action.
CP521 – If you have an Installment Agreement with the IRS, and have elected to make monthly payments yourself (as opposed to establishing a payroll deduction or direct bank debit plan), the IRS will mail you this monthly reminder notice with a ‘coupon’ to detach and send back with your payment.
CP523 – This notice advises you that your Installment Agreement is in a ‘default’ status. The notice advises you how long you have to correct the default condition before the balance moves into collection. Generally, this notice is sent when a payment is missed; if a taxpayer can reconcile the late payment by the date given, the agreement should remain in place.
CP501, 503 and 504 – These are all balance due notices, and unless an account was accelerated into collection, these notices would be mailed in this order. The CP504 is the last notice a taxpayer would receive before their account moves into collection.
CP2000 – This is a lengthy notice. It advises a taxpayer that a paper audit has been initiated. This notice proposes an additional tax increase because income was reported to the IRS which was not reported on a taxpayer’s return. The notice asks a taxpayer to respond by a certain date, either agreeing with the balance and indicating how they would like to make repayment, or disagreeing, in which case they must supply substantiation of the discrepancy with their response.
0484C – If a taxpayer’s balance-due account has been determined to be in a non-collectible status due to economic hardship, this letter confirms and provides the terms of that status.
0681C – A confirmation letter that advises a taxpayer that the IRS has accepted their proposal to full pay their balance within 4 months or less.
2272C – This letter advises a taxpayer that the IRS cannot consider their request for an installment agreement because various other outstanding issues have yet to be addressed or resolved. This letter carries appeal rights.
2273C / 3217C – These are Installment Agreement confirmation letters.
LT11 – This is a Final Notice / Intent to Levy. This is a required notice, sent certified, which carries appeal rights, and advises a taxpayer that the IRS intends to collect on a delinquent balance with enforced collections; it warns of garnishments on income or bank accounts.
LT21 / LT16 – Balance due notices that are sent by collection. These are generally sent prior to the LT11.
LT26 – A letter that advises a taxpayer that the IRS is looking for a delinquent tax return to be filed.
LT668-D – This is a release of levy on a taxpayer’s bank account or wages. A wage garnishment order is done via a 668-W and a levy of bank funds is sent out by a 668-A. All of these notices are sent to a bank or employer, not to the taxpayer directly. If a bank or employer fails to respond, the IRS will issue an LP59, reminding them of their obligation to respond to the legal order.
For more information on your notice, go to Understanding Your Notice at irs.gov. If your notice is not listed on that page, click the links for either individual or business under the heading What if My Notice isn’t Listed.