What Do IRS Notices Mean?

You've just received a notice from the IRS in the mailbox. What does it want? Do I need to pay them more taxes? Do I have an IRS issues? Do not panic. Your IRS problems can be solved. IRS notices are easy enough to handle.

Millions of notices are sent by the IRS per year. These could be anything from default notices to corrections on tax returns. Every notice points to an issue and includes the details on how to settle the matter.

The top of page 1 and the left hand side of the tear-off stub of the notice has the specific collection process or CP number assigned to it.

The most common CP (collection process) numbers are:

• CP12: Overpayment of at least $1 (Math error)
• CP14: Balance due (Math error)
• CP49: Overpaid tax applied to other taxes you need to pay
• CP90: Notice of intent to levy (Final notice, sent simultaneously with CP297)
• CP297: Final notice ý Notice of your right to a hearing (CP90 & CP297 are simultaneously sent)
• CP91: Notice before levy on Social Security benefits (Final notice, simultaneously sent with CP298)
• CP298: Notice of intent to levy on Social Security benefits (Final notice, sent simultaneously with CP91)
• CP161: No math error, balance due
• CP501: Balance due reminder notice
• CP504: Urgent notice ý balance due
• CP523: Notice of default on installation agreement
• CP2000: Notice of proposed adjustment for under/overpayment

If you agree with the change specified on the notice then no reply is necessary, unless you owe a balance. Send your payment using the details in the notice if you do owe a balance. Prompt action will make sure that you only need to pay additional tax and have not accrued any penalties or interest.

If you find the notice disagreeable, contact the IRS right away and present your reasons. A contact number should be listed on the notice. If you wish, you may send a written explanation but it has to be done in a timely manner. Show the reason why you don't agree with the notice in your letter. The notice has a tear-off portion that must be attached. The IRS will respond in 30 days.

Often the response is another notice asking for more information or simply answering your questions regarding the first notice. Simply follow the instructions on the notice as needed.

It's important to keep copies of your correspondence with the IRS for your records.

Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. His passion is providing IRS help to taxpayers with both individual and payroll tax problems. He teaches attorneys, CPAs and Enrolled Agents in the finer aspects of IRS representation all around the United States. He can be reached at his website at http://www.getIRShelp.com