Every year, the IRS sends out millions of notices to taxpayers. While many people panic at the sight of an envelope from the Internal Revenue Service, not all IRS letters are bad news. In fact, some of them are routine updates, requests for clarification, or notices of minor adjustments. However, some do require urgent action—and mishandling them can lead to costly penalties or legal trouble.

In this guide, we’ll break down the most common types of IRS letters, what they mean, and what to do if one lands in your mailbox or inbox.

Why the IRS Sends Letters (It’s Not Always a Problem)

Getting a letter from the IRS doesn’t necessarily mean you’ve done something wrong. The IRS uses notices as a way to communicate a wide range of updates, requests, and decisions. Common reasons include:

• A request for additional documentation to support a deduction or credit.

• Notification of a correction made to your return (which may result in a change to your refund or amount due).

• A reminder about an unpaid tax bill.

• Information about missing forms or incomplete filings.

• Verification of your identity or confirmation of your tax return.

The important thing to remember is this: Don’t ignore the letter. Even if it seems minor or incorrect, failing to respond can escalate the issue into a bigger (and more expensive) problem.

Common Types of IRS Notices You Might Receive

Understanding the specific notice type is crucial. Each letter comes with a unique code—often located in the upper right corner of the document—that indicates its purpose. Here are some of the most frequently issued notices:

CP2000 — Notice of Proposed Adjustment

The CP2000 notice is sent when the income or payment information the IRS has on file (from W-2s, 1099s, etc.) doesn’t match what you reported on your tax return. This doesn't mean you’re being audited, but it does require your attention. You’ll be given an opportunity to agree or dispute the proposed changes.

📌 What to Do: Review the discrepancies carefully and respond by the deadline. You may need to submit corrected forms, explanations, or additional documentation.

CP14 — Balance Due Notice

This is the IRS’s first formal notice informing you that you owe taxes. It includes the amount due, a due date for payment, and instructions for how to pay or set up a payment plan.

📌 What to Do: Don’t delay. Penalties and interest will begin to accrue. If you can’t pay in full, contact the IRS or a tax professional to explore installment options.

LT11 — Final Notice Before Levy

An LT11 notice is serious. It’s a final warning before the IRS begins collection actions like wage garnishment or asset seizure. This letter typically comes after several previous notices have gone unanswered.

📌 What to Do: Act immediately. This notice also gives you the right to request a Collection Due Process (CDP) hearing. Working with a tax professional at this stage is strongly recommended.

Other notices include identity verification requests, audit letters, and notices about tax return errors or amended return adjustments. Always read the entire letter and pay attention to due dates.

How to Respond to IRS Correspondence the Right Way

Once you’ve read the letter and understood what it’s about, it’s time to respond properly. Here's a step-by-step breakdown:

1. Read the Letter Thoroughly

Make sure you understand what the IRS is asking for. Highlight dates, deadlines, and any proposed changes to your tax return or status.

2. Gather Documentation

You’ll likely need to provide supporting documents—such as W-2s, 1099s, expense receipts, or bank statements—to respond. Keep a copy of everything you send.

3. Respond Promptly

Most IRS letters come with a 30-day response window. Ignoring the notice or waiting too long can lead to automatic penalties or enforcement action.

4. Use Certified Mail or e-Services

If you're mailing your response, always send it certified with a return receipt. If you’re responding online or via fax, retain confirmation of your submission. This ensures you can prove compliance if needed.

5. Keep a Copy for Your Records

Always keep a record of the original notice, your response, and any related communication. These may be critical if the issue is escalated or if you work with a tax advisor later.

What NOT to Do When You Receive an IRS Notice

Fear and misinformation often lead taxpayers to make bad choices when they receive a letter from the IRS. Here are the most common missteps—and why you should avoid them:

❌ Don’t Ignore It

The longer you wait, the more limited your options become. Ignoring a notice can lead to penalties, interest, levies, or even legal action.

❌ Don’t Assume the IRS Is Wrong

Even if you believe the IRS has made a mistake, it’s your responsibility to provide documentation and respond. The IRS works with third-party data, and errors can happen—but it's up to you to set the record straight.

❌ Don’t Pay More Than You Owe Without Verification

Don’t rush to pay a balance without reviewing the notice. Sometimes errors in reporting or data mismatches can falsely inflate your tax bill.

❌ Don’t Rely on Internet Forums or Social Media for Advice

Tax advice is specific to your situation. Don’t rely on generalized advice from unverified sources. Reach out to a licensed tax professional or the IRS directly.

When to Get a Tax Professional Involved

Some situations are relatively easy to resolve on your own—but others warrant professional help. Here are a few signs it’s time to call in an expert:

Your Notice Involves a Large Amount of Money

If the IRS is proposing a significant balance due, penalties, or disallowed deductions, a tax advisor can help you negotiate a more favorable outcome or provide documentation to dispute the charges.

You’ve Missed Deadlines or Received a Final Notice

If you're already behind on responding—or worse, have received an LT11 (final notice before collection action)—it’s essential to act quickly and with professional guidance.

You’re Being Audited

An IRS audit, even a correspondence audit, is not something you want to navigate alone. A tax professional can help you prepare documents, understand your rights, and represent you during the process.

You Don’t Understand the Notice

Even with straightforward notices, it’s easy to misinterpret language or miss key details. A tax expert can help clarify the situation and recommend the right course of action.

Getting a Letter? Don’t Panic—Take Control

IRS letters can be stressful—but they don’t have to be overwhelming. The key is to respond quickly, accurately, and with the right strategy. Whether it’s a minor mismatch or a more serious collection notice, taking the right next step can save you time, money, and peace of mind.

If you’ve received a letter from the IRS and aren’t sure what it means—or how to respond—our team at Bernstein Tax Group is here to help. We offer expert guidance, stress-free correspondence management, and a plan to help you stay in good standing with the IRS.

📅 Schedule a free consultation today to get clarity on your IRS notice and protect your finances.