Got a letter from the IRS? What it means and which deadline is running

A letter from the IRS is nothing out of the ordinary. The IRS itself lists the usual reasons: a balance due, a changed refund, a question about your return, identity verification, a correction to your return or a delay in processing. Almost every letter carries a number and a deadline. Know both, and you know what to do. This page explains how to identify a letter, which letters businesses receive most often, the order in which payment demands arrive and how to respond. How the agency thinks and works is covered on our page on the mindset and working style of the IRS.

1First: the number and whether it is genuine

Every IRS letter carries an identifier, either a CP number (Computer Paragraph) or an LTR number for a letter. You'll find it in the top right corner. Use it on the IRS page "Understanding your IRS notice or letter" to find an explanation of that exact letter: what it is about, what you need to do and what questions others have had. Many letters have their own page there.

The number is also your first authenticity check. If you can't find the letter there, or it looks suspicious, the IRS advises calling 800-829-1040 and following the prompts. The IRS also describes the signs of a scam: threats of arrest or deportation, demands for immediate payment with no chance to question the amount or appeal, and oddly written links that lead to sites other than irs.gov. A genuine letter always gives you a way to dispute it.

A practical tip for companies with owners abroad: the IRS writes to the address it has on file for the company. If that is a Registered Agent's address, the mail goes there. To make sure letters reach you, check the address on file and change it with Form 8822-B if needed.

2The ground rules for every response

The IRS spells out the rules itself on its overview page, and they are simpler than many people expect.

• Read it and keep it. Read the whole letter and hold on to it. If the IRS asks for a response, respond by the date given.
• You agree? Then do what is asked. You only need to reply if the IRS expressly asks you to.
• You disagree? Follow the instructions in the letter and include documentation. To be sure of preserving your appeal rights, respond by the date in the letter.
• There's a balance due? Pay by the date given, even if you can't pay it all. That reduces interest and penalties.
• The IRS changed your return? Compare the figures with your return. If you agree, note the correction on your own copy. You only need to act if the IRS requests something, a balance is due or you disagree.

Many letters can be answered in more than one way. Depending on the letter, the IRS lists uploading through its Document Upload Tool with the access code from the letter, faxing the number of the relevant service center, or mailing the address on the letter. What applies is stated in the letter itself.

3The most common letters to businesses

3.1CP575: your EIN confirmation

CP575 confirms the company's Employer Identification Number. The IRS provides the digital version in the Business Tax Account, and it replaces the original letters in the CP575A to J series and Letter 147C, the confirmation of a previously assigned EIN. According to the IRS, banks and other institutions accept it as written proof. The original letter cannot be reissued, so keep it safe. How the company gets its EIN is explained under Applying for an EIN.

3.2CP148A and CP148B: the new address

When the company's address changes, the IRS sends CP148A to the new address and CP148B to the old one. If the change is correct, you don't need to do anything. If it is wrong, send the letter back with a completed Form 8822-B.

3.3CP259: a return is missing

When it assigns the EIN, the IRS determines which returns it expects from the company, such as Form 1120 or the payroll tax return Form 941. If one of them is missing, CP259 arrives, one letter per form and period. The IRS asks you to file the return immediately. If you believe there is no filing requirement, complete the enclosed response form and send it by mail or by fax to 855-800-5944. If you filed in the last four weeks under the same name and EIN, you can disregard the letter. For corporations, the Form 1120 rule applies: every domestic corporation files a return whether or not it has taxable income; more on this under Form 1120.

3.4CP161 and CP134B: a balance due

CP161 tells you there is a balance due on the company's account and explains how it was calculated. Compare the figures with the return and check the list of payments credited. If you believe the IRS made a mistake, the IRS says to contact it within ten days of the date of the letter. CP134B reports that the deposits received don't match the amounts on the return; if payments are missing from the statement, call the number in the letter.

3.5CP136 and CP162: deposits and filing requirements

CP136 tells employers how often to deposit payroll taxes next year: monthly if the tax for the four quarters of the lookback period was $50,000 or less, otherwise semiweekly. CP162 concerns a penalty because a return was not filed electronically as required or was incomplete; the IRS page says who may call and when relief for reasonable cause is possible.

3.6CP215: an assessed penalty

CP215 tells you the IRS has assessed a civil penalty and states the amount, the due date and how to pay. According to the IRS manual, CP215 is also the letter used to notify the penalty for a missing or late Form 5472. Separate relief rules apply to it, which you'll find under Penalties and late filing.

4Payment notices and their sequence

If a balance is due and nobody responds, the letters follow a fixed sequence. For individuals it starts with CP14, for businesses with letters such as CP161. Next come CP501 as the first reminder and CP503 as the second. With CP503 the IRS points out that it may file a Notice of Federal Tax Lien, a public notice to creditors that can hurt your creditworthiness.

CP504 is the notice of intent to levy under Section 6331(d). If the taxpayer does not pay, the IRS can, among other things, seize state tax refunds and then levy other assets. In this letter the IRS also notes that the State Department can deny or revoke a US passport for seriously delinquent tax debt; for most readers without a US passport, that does not matter.

The final stage is LT11 or Letter 1058, in certain cases CP90 or CP297. These letters announce the levy and set out your right to a Collection Due Process hearing before the Independent Office of Appeals. According to the IRS, you have 30 days from receipt; you request the hearing with Form 12153. When a lien is filed, Letter 3172 likewise gives you 30 days.

4.1If you can't pay it all at once

At every stage you can request a payment plan, online, by phone or with Form 9465. For individuals owing less than $50,000, the IRS names the online application as the fastest route. If you miss the terms of an agreed payment plan, you get CP523, a notice that the IRS intends to end the agreement and levy; at that point, pay before the stated date and get in touch right away.

5When the IRS wants to change your return

A second group of letters is about the content of your return, not payment. CP11 and CP22A tell you the IRS has corrected errors or made changes that result in a balance due; CP12 reports a correction that leads to a refund or changes one. With CP102, a correction for a math error, the IRS reverses the change if you object in writing within ten days of the letter date; if it cannot justify reversing it with additional information, it refers the case for examination.

CP2000 is not an assessment. In it the IRS proposes changes because information from third parties, such as employers or financial institutions, doesn't match your return. That can raise your tax, lower it or leave it unchanged. You respond by the stated date using the enclosed form and supporting documents. If you don't respond, you may receive another letter and a bill.

5.1CP3219A: the assessment with a deadline to sue

A Notice of Deficiency such as CP3219A is more serious, and here the deadline matters most. The letter announces additional tax and explains how to challenge it in the US Tax Court. The law gives you 90 days from mailing, or 150 days if the letter is addressed outside the USA. The IRS stresses that it cannot extend this deadline and that a late petition will not be heard. Talking to the IRS during this period does not extend the deadline.

6Responding from abroad

If you live in Europe, three practical points come on top. First, time: a letter often goes to an address in the USA and is forwarded from there. Many deadlines run from the date of the letter or its mailing, not from the day it reaches you. If you have a company in the USA, make sure your Registered Agent scans and forwards mail immediately.

Second, the channel: where the IRS offers upload or fax, that is usually the fastest route from Europe. If you send by mail, use a service with proof of delivery. Keep a complete, dated copy of everything you send.

Third, representation: with Form 2848 you authorize an advisor to represent you before the IRS. They can then speak to the IRS, review records and file requests. If you get stuck, the IRS says you can turn to the Taxpayer Advocate Service, an independent office within the IRS.

7When a letter turns into a request

Many letters are settled with a payment, a confirmation or a late-filed return. It's different when a penalty has been assessed that you believe is unjustified. Then there are two routes: the IRS first-time abatement for late filing or late payment penalties with a clean history, and a request for reasonable cause. The IRS removes some penalties by phone at the number on the letter; if that isn't enough, you request abatement in writing, with Form 843 if needed. If the IRS refuses, you can appeal to Appeals, usually within 30 days of the denial letter.

Stricter rules apply to the Form 5472 penalty; you'll find them under Penalties and late filing. What your company has to file throughout the year so these letters never arrive is shown in the annual compliance calendar, and the US corporate tax glossary explains every term on this page.

In short

• The letter number is in the top right corner; use it on irs.gov to see what it's about and to spot fakes.
• If you agree, do what is asked; if you disagree, respond with documents by the date in the letter to protect your rights.
• For businesses, CP575, CP259, CP161 and CP215 are the most common letters.
• Payment notices follow a fixed sequence up to the notice of intent to levy; after LT11 or Letter 1058 you have 30 days to request a hearing.
• You can challenge a Notice of Deficiency such as CP3219A in the Tax Court within 90 days, or within 150 days if addressed outside the USA.

How we help you

• IRS letters and penaltiesMail from the IRS? We reply, request penalty relief and put things right.
• US Tax ConsultationYour US tax question, answered by people who know both sides.
• Zero Tax Return LLCPro forma Form 1120 and Form 5472 for the single-member LLC.
• Corporation tax returnForm 1120 and Form 5472 for your US corporation.