Got an IRS Notice? What Each Letter Means and How to Respond

Written by CA Sumit ChandwaniChartered Accountant & Founder · Reviewed by Minal Bihani, EA

First rule: never ignore it. Second rule: never call the IRS in a panic before you understand what the notice actually says.

The notices you're most likely to get

• CP2000 — underreported income. A computer matched your return against 1099s/W-2s and found a gap. It's a proposal, not a bill — you can agree, partially agree, or dispute with documentation.
• CP14 — balance due. The first bill. Interest is already running; the response options are pay, set up a plan, or dispute the math.
• CP504 / LT11 — escalation. Intent-to-levy territory. These have real teeth and short windows — get representation now.
• Penalty notices (like the CP215 for Form 5472) — assessed automatically; abatement requests are the answer, not the payment slip.

How to respond well

• Match the notice number (top-right corner) to what it's claiming before doing anything
• Respond in writing by the deadline, keep copies, use certified mail or the online upload tools
• Agree only with what's actually correct — CP2000s are frequently wrong about basis, duplicates and non-taxable items
• If money is owed and correct, pair the response with a payment plan rather than silence

What not to do

Don't ignore it, don't pay a penalty that qualifies for abatement, and don't explain your whole life story in writing — answer the specific question the notice asks, with evidence, and stop.

The bottom line

Notices are deadlines with paperwork attached. Decode, respond, document. MOREOFTAX reviews notices free and answers them under power of attorney for a flat fee.