Reading an IRS notice, line by line
Every IRS notice has the same few parts. Once you know where they are, the letter gets a lot less frightening.
Most people read an IRS notice from the top, get to the amount, and stop. Read it in this order instead.
1. The notice number
Top or bottom right corner: CP or LTR followed by a number, like CP2000 or LTR 1058. It tells you what kind of letter this is. A CP2000 proposes a change because income didn't match a form the IRS received; an LTR 1058 is a final notice before a levy. Search the number on irs.gov before anything else.
2. The tax year and form
Near the top, the letter names the tax period and the return, such as Form 1040 for 2024. Check that it's a year you filed, and pull that return out.
3. What the amount includes
The amount due is usually tax plus penalties plus interest, broken out on a later page. Penalties can sometimes be removed even when the tax can't, so note them separately.
4. The reply date
Look for 'respond by' or a date in bold. Some deadlines are set by law and can't be moved: 30 days to ask for a collection hearing, 90 days to petition the Tax Court. Write the date somewhere you'll see it.
5. What it asks you to do
- Agree and pay, or agree and set up a plan
- Disagree and send an explanation with documents
- Call the number on the letter
- Do nothing, which lets the proposed change stand
If you only do one thing today, find the reply date.
If the letter mentions a levy, a lien or a deficiency, or the amount is more than you can pay, that's a good point to have a lawyer read it.