How To Handle IRS Notices

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There is an IRS notice in your mailbox. What does it want? Do I have unpaid taxes? Do I have IRS problems? Now is not the time to panic. IRS issues have a resolution. Most IRS notices are easy enough to address. Millions of notices are mailed by the IRS each year. These are anything from default notices to corrections on tax returns. Every notice points to an issue and includes the details on how to resolve the matter. Collection process (CP) numbers are assigned to each notice. You may see the numbers on the left side of the notice’s tear-off stub or at the top of the first page of the notice. The most common notices are:

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

You do not have to reply if you agree with the notice and don’t need to pay a balance. Send your payment using the information on the notice if you do need to pay a balance. You will not accrue any interest and penalties if you act promptly. If you do not agree with the purpose of the notice, you need to call the IRS as soon as possible and explain why you don’t agree. The notice will list a number. If you want, you can mail a written explanation but do it in a timely manner. When writing, you can include information and documentation that show the reason why you do not agree with the notice. The notice has a tear-off portion that must be attached. The IRS will respond within thirty days. The response may simply answer your questions or it may be another notice asking for more information. No reason to panic. Simply follow the instructions on the notice as told. Always keep copies of IRS correspondences.

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