What to Do When an IRS Letter Arrives

I have opened a lot of IRS letters with clients over the years, and I can tell you the letter itself is almost never as bad as the panic it causes in the first five minutes. Most notices are routine. Some ask you to confirm information. Some propose a change to a return. A smaller number are more serious, involving an audit or a balance owed. What separates a manageable situation from a stressful one is usually not the letter itself, it is what happens in the days right after you receive it.

Read It Before You React to It

Every IRS notice has a number in the corner, something like a CP or LTR code, and that code tells you exactly what the letter is about. Read the whole letter before deciding how worried to be. Some notices are informational only. Some are proposing a change and giving you a chance to respond. Some come with a real deadline, and that deadline matters, because your options can narrow the longer you wait. Note the deadline the day the letter arrives, not the day you finally sit down to deal with it.

What Not to Do

• Do not ignore it. A letter that goes unanswered tends to escalate into a more serious one, and deadlines do not pause because you were busy.
• Do not call the number on the letter and start explaining your situation before you understand what is actually being asked of you.
• Do not assume the proposed change is correct just because it came from the IRS. Notices are generated from data matching and are sometimes wrong.
• Do not assume it is a scam and throw it away either. Real IRS notices arrive by mail, not by a threatening phone call demanding gift cards.

What an Enrolled Agent Can Do That You Cannot Do Alone

This is where my second credential matters. I am a CPA, and I am also an Enrolled Agent, which is a federal license granted directly by the IRS rather than by a state. The Enrolled Agent credential authorizes me to represent taxpayers before the IRS, in all fifty states, for audits, collections, and appeals. That is a specific legal authority, not just tax knowledge. It means I can communicate with the IRS on your behalf, respond to a notice for you, and sit across the table, so to speak, during an audit or a collections matter, so you are not doing it alone and you are not the only voice in the conversation.

A taxpayer without representation is allowed to handle an IRS matter alone, but doing it alone means every word you say to an examiner becomes part of the record, and it is easy to answer a question more broadly than it was actually asked. Having someone licensed to represent you changes the shape of that conversation. I am not promising a particular outcome, because the outcome depends on your specific facts and the accuracy of the original return, but I can tell you that having representation changes how the process goes for you.

What I Do When a Client Brings Me a Letter

The first thing I do is read the notice completely and identify exactly what it is asking for and by when. Then we pull the return in question and check the notice against what was actually filed. From there, the response depends entirely on what the letter says: sometimes it is a straightforward documentation request, sometimes it requires a formal response disputing a proposed change, and sometimes it opens into a longer audit process that needs ongoing representation.

Why a Second Pair of Eyes Helps Even on a Simple Notice

Not every notice needs a drawn-out response. Plenty are resolved with a short, well-supported letter and a copy of the right document. But even a simple notice benefits from someone who has seen the pattern before, because the IRS's own explanation of what it wants is not always written the way an ordinary taxpayer would expect. I have seen straightforward matters get more complicated than they needed to be, simply because the response sent back did not address what the notice was actually asking. A clear, correctly targeted response the first time is usually faster than a back and forth that drags on for months.

If an IRS letter has landed in your mailbox and you are not sure what it means or what to do next, do not sit with it alone. I offer a free consultation, and bringing me the actual letter is the fastest way for me to tell you where you stand. Call (210) 842-8197, or reach out to set up a time, in person or by video.