Interactive IRS Notice Response Guide

Received a Notice from the IRS?

Don't panic. This guide is designed to help you understand complex IRS notices and find the best resolution for your situation. Start with step one now.

Step 1: Analyze Your Notice

Select the notice number from the top-right corner of your letter (e.g., CP2000) to get an instant analysis.

Select your notice number:

Step 2: Find Your Response Pathway

There are three basic pathways you can take depending on your position regarding the IRS's claims.

Pathway 1: I Agree

This is for when you've reviewed the notice and determined the IRS is correct. Agreeing promptly stops additional interest and penalties from accruing.

Sign and return the response form.
Pay the amount due in full or in part.
Request a payment plan if needed.

Pathway 2: I Disagree

Use this path if you have evidence that the IRS's facts or interpretation are wrong, or if you have additional deductions to claim.

Always respond in writing.
Provide clear supporting documents (copies).
Consider a formal appeal.

Pathway 3: I Can't Pay

This path is for when you agree with the IRS but lack the financial ability to pay the full amount. Do not ignore the notice.

Request an Installment Agreement (IA).
Check eligibility for an Offer in Compromise (OIC).
Consider a Collection Due Process (CDP) hearing.

The Biggest Tax Benefit Is Avoiding Non-Response

Ignoring an IRS notice can lead to significant penalties and interest, making the situation much worse. A timely response is the best tax-saving strategy.

Cost Comparison: Tax Due vs. Potential Penalty for Non-Response

This chart visually compares an original tax due of $5,000 with the potential penalties and interest that could accrue from failing to respond in a timely manner.

Step 3: Finding the Right Solution

Compare the main options for resolving a tax debt and find the method best suited to your situation.

Solution	Best For	Key Benefit
Installment Agreement (IA)	Taxpayers who can pay the full amount over time but not all at once.	Stops enforced collections (levies), allows for manageable monthly payments.
Offer in Compromise (OIC)	Taxpayers in significant financial hardship who cannot pay the full debt.	Allows final resolution of the tax debt for less than the full amount owed.
Collection Due Process (CDP)	Taxpayers who received a Final Notice of Intent to Levy and dispute the action.	Legally suspends all enforced collection activity while the appeal is pending.
Appeals	Taxpayers who disagree with the outcome of an audit or proposed adjustment.	Opportunity for settlement based on "hazards of litigation" with an independent office.

Step 4: Your Shield, The Taxpayer Bill of Rights

When dealing with the IRS, you are legally guaranteed 10 fundamental rights. Understand and use them.

1. The Right to Be Informed: You can demand clear explanations.

2. The Right to Quality Service: You have a right to prompt, professional assistance.

3. The Right to Pay No More than the Correct Amount of Tax: You only have to pay what is legally owed.

4. The Right to Challenge the IRS’s Position and Be Heard: You can submit objections and evidence.

5. The Right to Appeal an IRS Decision in an Independent Forum: You are guaranteed a fair appeals process.

6. The Right to Finality: There are time limits for audits and collections.

7. The Right to Privacy: IRS inquiries must be no more intrusive than necessary.

8. The Right to Confidentiality: Your information is protected.

9. The Right to Retain Representation: You can hire an attorney or CPA to assist you.

10. The Right to a Fair and Just Tax System: You can ask the system to consider your unique circumstances.