If you receive an IRS letter, do not panic, but do not ignore it. Open it immediately, as it usually contains specific instructions regarding a tax return, balance due, or identity verification. Review the details, compare them with your records, and respond by the deadline if necessary, typically by mail.
When an IRS letter or notice arrives in the mail, here's what taxpayers should do:
We may send you a notice or letter if:
How to Respond to a Letter From the IRS
It may be about a specific issue on your federal tax return or account, or may tell you about changes to your account, ask you for more information, or request a payment. You can handle most of this correspondence without calling or visiting an IRS office if you follow the instructions in the document.
If a taxpayer receives an IRS letter or notice, they should: Not ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. The notice or letter will explain the reason for the contact and gives instructions on what to do.
You know the IRS might be investigating you through official mail (first contact), phone calls (often with automated messages to IRS.gov), or in-person visits, but signs of a criminal probe include contact with IRS Criminal Investigation (CI) agents, subpoenas to you or your bank, questions to your accountant/bank, unusual account activity (freezing/refusing transactions), or agents suddenly going silent after an audit. Key indicators are official IRS letters, contact from CI special agents, third-party inquiries, and formal summonses for records, signaling serious scrutiny beyond a simple audit.
The biggest tax mistakes people make include filing late, math errors, incorrect personal info (like Social Security numbers), forgetting deductions/credits (like EITC), misreporting income, not signing forms, and making errors with bank details for direct deposit, all leading to delays, penalties, or missed savings, with using tax software or professionals helping avoid these common pitfalls.
How to address an IRS audit
An IRS notice may alert you to a mistake on your tax return or that it's being audited. You can verify the information that was processed by the IRS by viewing a transcript of the return to compare it to the return you may have signed or approved. You can access your tax records through your account.
An IRS audit letter typically contains the taxpayer's name, tax ID number, contact information, and a request for additional documentation to support claims on the tax return. It may also include the name of the IRS officer handling the case and invite the taxpayer to a meeting.
Common reasons the IRS may send you a letter
Here are some of the most common reasons you may receive a letter or notice: You owe a balance on your tax return and need to make a payment. Your tax refund has been adjusted by the IRS. You have questions on your return that the IRS wants clarified.
To tell if an IRS letter is real, check for typos and poor grammar, verify it contains specific personal info (like the last 4 of your SSN), look for an official notice number (CP or LTR) and logo, and ensure it doesn't demand immediate payment via gift cards or threaten arrest, as scammers do. If in doubt, log into your secure IRS Online Account or call an official IRS phone number (not one from the letter) to verify.
Don't reply unless instructed to do so.
There is usually no need for a taxpayer to reply to a notice unless specifically instructed to do so. On the other hand, taxpayers who owe should reply with a payment. IRS.gov has information about payment options.
If the IRS decides that your return merits a second glance, you'll be issued a CP05 Notice 1 . This notice lets you know that your return is being reviewed to verify any or all of the following: Your income. Your tax withholding.
IRS audits are triggered by discrepancies the IRS's automated systems catch, like unreported income from 1099s, claiming excessive deductions (charity, business meals, home office) compared to your income bracket, large business losses, math errors, significant income jumps, or claiming hobby losses as business expenses, with higher-income earners generally facing more scrutiny.
What happens during an audit? Internal audit conducts assurance audits through a five-phase process which includes selection, planning, conducting fieldwork, reporting results, and following up on corrective action plans.
What happens if you ignore them: Your case is flagged for final notice status. This means the IRS is preparing to issue legal notice of intent to levy your wages, bank accounts, or seize property.
Attorneys, certified public accountants, enrolled agents or anyone who gets paid to prepare tax returns may owe a penalty if they don't follow tax laws, rules and regulations.
The government has no legal obligation to notify you that you're under investigation. There is no constitutional right to know that prosecutors are building a case against you.
Filers most commonly receive letters from the IRS notifying them of the examination in the fall or winter months of the previous tax filing year. Yet, the auditors can mail the notifications throughout the year.