What Should You Do After Receiving an IRS Notice?

Receiving a letter from the IRS can be concerning, but an IRS notice does not automatically mean that you have done something wrong or that you are facing a serious tax problem.

The IRS sends notices for many reasons, including questions about a tax return, missing information, changes to reported income, balances due, or requests for additional documentation. The important thing is to understand the notice and respond appropriately before any applicable deadline.

Read the Entire IRS Notice

Start by carefully reviewing the complete notice.

An IRS letter will generally explain why the agency contacted you, what information it has reviewed, whether it proposes a change to your tax return, and what action—if any—it expects you to take.

Pay particular attention to:

• The tax year involved

• The type of notice

• The reason for the notice

• Any proposed tax changes

• Amounts the IRS says are due

• Documents being requested

• Response instructions

• Applicable deadlines

Do not assume that the first dollar amount you see is necessarily the amount you ultimately owe.

Why Does the IRS Send Notices?

There are many reasons the IRS may contact a taxpayer.

Common situations can include:

• Income reported differently from IRS records

• Missing tax returns

• Changes to a previously filed return

• Additional taxes due

• Questions about deductions or credits

• Missing documentation

• Estimated tax payment issues

• Penalties or interest

• Identity verification

• Requests for additional information

Understanding exactly why the notice was issued is the first step toward determining the appropriate response.

Compare the Notice With Your Tax Return

If the notice relates to a previously filed return, compare the information in the letter with your copy of that return and your supporting documents.

Gather relevant records such as:

• W-2s

• 1099s

• Schedule K-1s

• Brokerage statements

• Business records

• Payment confirmations

• Previous IRS correspondence

• Your filed tax return

A discrepancy may result from missing information, reporting differences, processing issues, or information the IRS received from another source.

Don't Ignore the Response Deadline

IRS notices frequently include a deadline for responding.

Even when you disagree with the notice, ignoring it can make the situation more difficult. Depending on the issue, additional penalties, interest, collection activity, or other consequences may occur if the matter remains unresolved.

Review the deadline as soon as you receive the letter so there is enough time to understand the issue and prepare an appropriate response.

What If You Agree With the IRS Notice?

If you review the notice and agree with the IRS's proposed changes, the letter should explain what action is required.

Depending on the situation, you may need to make a payment, provide requested information, sign and return documentation, or take another specified action.

Before responding, make sure you understand how the change affects your overall tax situation.

What If You Disagree With the IRS?

You do not necessarily have to accept a proposed IRS adjustment simply because you received a notice.

If you believe the IRS information is incorrect, you may be able to respond with an explanation and supporting documentation.

The appropriate response depends on the type of notice and the underlying issue.

This is another reason it is important to review the notice carefully rather than immediately paying an amount you do not understand.

What If the IRS Says You Owe Money?

A balance-due notice should be reviewed to determine why the balance exists.

The amount may potentially include:

• Unpaid tax

• Penalties

• Interest

• Adjustments to a return

• Previously uncredited payments

If the balance is correct but you cannot pay it in full immediately, payment options may be available depending on your circumstances.

The first step is confirming that the underlying balance itself is accurate.

Keep Copies of Everything

Maintain copies of the original IRS notice and anything you send in response.

Your records should include supporting documents, correspondence, payment confirmations, and other relevant information.

If the issue requires additional communication with the IRS, having an organized record of what has already occurred can make the process considerably easier.

Be Careful About IRS Scams

Not every message claiming to come from the IRS is legitimate.

Be cautious with unexpected phone calls, emails, text messages, or requests for unusual forms of payment.

If you are uncertain whether correspondence is legitimate, verify it through appropriate official channels before providing personal or financial information.

When Should You Contact a Tax Professional?

Professional assistance may be particularly useful when:

• You don't understand why you received the notice

• The IRS proposes a significant adjustment

• You disagree with the IRS

• Multiple tax years are involved

• Business income is involved

• The notice concerns unreported income

• Penalties are substantial

• You have received multiple notices

• A response deadline is approaching

Having the notice reviewed early can help identify the issue before it becomes more complicated.

IRS Notice Assistance With James Ridout CPA

James Ridout CPA helps individuals and businesses understand and respond to IRS notices and tax correspondence.

Our team can review your notice, examine the related tax information, explain what the IRS is requesting, and help determine the appropriate next steps for addressing the issue.

If you've received an IRS letter and aren't sure what to do next, getting the notice reviewed promptly can provide clarity and help you respond appropriately.

Schedule a Consultation →

This article is intended for general informational purposes and should not be considered individualized tax, legal, or financial advice. IRS procedures and available options depend on the specific notice, individual circumstances, and applicable tax law.