Legal Information Notice
This guide provides general educational information about common IRS notices. It is not legal or tax advice. If you have received an IRS notice, consult a licensed tax attorney or enrolled agent before responding — especially for notices proposing additional tax, initiating collection, or requesting information under examination. Do not ignore IRS notices. Reading this does not create an attorney-client relationship.
The Golden Rule: Never Ignore an IRS Notice
The single most important thing to know about receiving an IRS notice is this: do not ignore it. Every IRS notice has a response deadline, and missing it can waive your right to appeal, result in automatic assessment of additional tax, or accelerate IRS collection action. Even if you believe the notice is wrong, the correct response is to address it — not to set it aside hoping it goes away.
The second most important thing: read the notice carefully before doing anything. Most IRS notices are about one specific issue — often something quite routine — and do not represent the catastrophic situation they initially feel like.
How to Read an IRS Notice
Every IRS notice includes a notice number (e.g., "CP2000" or "Letter 525") in the upper right corner. This number tells you exactly what type of contact it is and what the IRS expects from you. The notice also includes:
- The tax year(s) involved
- The amount of proposed additional tax (if any)
- A response deadline — usually 30, 60, or 90 days
- Instructions for how to respond
- A toll-free IRS phone number
The Most Common IRS Notices California Taxpayers Receive
CP2000 — Underreporter Notice
The most common IRS notice. The IRS received information from third parties (employers, banks, brokerages, mortgage companies) that doesn't match what you reported. The CP2000 proposes additional tax based on the discrepancy. It is not a bill or an audit — it is a proposal. You have the right to agree, disagree, or partially agree. Response deadline: typically 60 days.
Common causes: Unreported 1099 income, stock sales not reported, cancelled debt income (1099-C), retirement distributions.
CP14 — Balance Due Notice
The IRS has assessed a balance due and you haven't paid it. This is typically the first notice in a collection sequence. It includes the tax owed, penalties, and interest. Interest and penalties continue to accrue. Response deadline: typically 21 days.
CP501 / CP503 — Reminder Notices
Follow-up reminders that a balance is due. These come after the CP14 if no payment or response is made. Urgency increases with each notice in the sequence.
CP504 — Intent to Levy Notice
This is serious. The CP504 is a Notice of Intent to Levy — it warns that the IRS intends to seize state tax refunds and potentially other property if the balance is not resolved. This notice is also required before the IRS can file a federal tax lien. Response deadline: 30 days before levy action can begin.
Letter 11 (LT11) — Final Notice of Intent to Levy and Right to Hearing
This is the critical notice that triggers your right to a Collection Due Process (CDP) hearing. You have 30 days from the date of this letter to request a CDP hearing. Requesting a CDP hearing suspends all levy action while the case is reviewed. Missing this 30-day window permanently waives your CDP rights for that assessment. If you receive this letter, contact a tax attorney immediately.
Letter 525 — Examination of Tax Return (Correspondence Audit)
The IRS has selected your return for examination of one or more specific items. This initiates a correspondence audit — conducted by mail, focused on specific deductions, credits, or income items. See our full IRS audit guide for how to respond.
CP05 — Identity and Refund Verification
The IRS is holding your refund while it verifies your identity and the accuracy of your return. No action is typically required unless the notice asks you to call or provide specific information. Refund delays from CP05 notices can run 60–120 days.
Letter 3172 — Notice of Federal Tax Lien Filing
The IRS has filed a Notice of Federal Tax Lien in the public records of your county. A tax lien attaches to all your property and creates a public record of the IRS claim against your assets. It can affect your ability to sell real estate, obtain credit, or conduct business. You have 5 business days from the filing to request a Collection Due Process hearing.
The Collection Notice Sequence: Understanding the Escalation
| Notice | What It Means | Urgency |
|---|---|---|
| CP14 | First balance due notice | Respond within 21 days |
| CP501 | Second reminder | Increasing urgency |
| CP503 | Third reminder | High — pay or respond now |
| CP504 | Intent to levy state refunds | Very high — 30 days |
| Letter 11 / LT11 | Final Notice of Intent to Levy | Critical — 30 days to request CDP |
| Lien / Levy | Active collection action | Emergency — seek help immediately |
When to Get Professional Help Immediately
Certain notices require professional representation before you respond: Letter 11 (Final Notice of Intent to Levy), any notice proposing a large tax assessment you dispute, any notice suggesting criminal referral or fraud penalty, and any notice following an audit that you believe is incorrect. A tax attorney can represent you at all stages, provides attorney-client privilege, and knows how to stop collection action while preserving your options.
General information. Consult a licensed tax attorney before responding to any IRS notice that proposes additional tax or initiates collection.