You have just received a notice from the IRS in the mail. What does it mean? Do I owe the IRS money? Do I have IRS Problems? Now is not the time to panic. Your IRS Problems can be solved. You will find that most IRS notices can be easily handled.

The IRS sends out millions of notices per year. These notices can range from telling the taxpayer that there is a mistake on a return that needs to be corrected to a notice of default. Each notice is specific to an issue and includes the instructions on how to settle the matter.

Every notice has a specific CP (collection process) number assigned to it. These numbers can be found at the top on the first page of the notice and on the left side of the tear-off stub that is usually included.

The most common notices include:

1. CP12 Math error – over payment of $1 or more

2. CP14 Balance due

3. CP49 Overpaid tax applied to other taxes you owe

4. CP90 Final notice – Notice of intent to levy

5. CP297 Final notice – Notice of your right to a hearing

(CP90 & CP297 are sent simultaneously)

6. CP91 Final notice before levy on Social Security benefits

7. CP298 Final notice of intent to levy on Social Security benefits

(CP91 & CP298 are sent simultaneously)

8. CP161 No math error, balance due

9. CP501 Reminder notice – balance due

10. CP504 Urgent notice – balance due

11. CP523 Notice of default on installation agreement

12. CP2000 Notice of proposed adjustment for underpayment or overpayment

If you agree with the change proposed on the notice then no reply is necessary unless you owe a balance. If this is so, send your payment using the information on the notice. Prompt action on your part will ensure that you only owe additional tax and have not accrued any penalties or interest.

If you disagree with the purpose of the notice, you need to contact the IRS as soon as possible and explain why you disagree. A contact phone number should be listed on the notice. If you wish, you can send a written explanation but do it in a timely manner. When writing you can include information and documents that show the reason you disagree with the information on the notice. Always include the tear-off portion of the notice. Be patient as the IRS may take up to 30 days to respond.

Sometimes the response is another notice asking for more information or simply answering your questions regarding the first notice. This is not a reason to panic. Just follow the instructions on the notice as instructed.

Remember to keep copies of all of your correspondence with the IRS with your records.