IRS Notices and Letters
The Internal Revenue Service will notify taxpayers via the United States Postal Service in the form of Notices and Letters.
Some notices are informational, and some require the taxpayers’ action. Below is a brief list of common Forms and Notices with a summary:
IRS CP2000 Notice: The CP2000 notice series includes CP2000, CP2000A, CP2000B, CP2000C, CP2000D, and CP2000E. The income or payment information from third parties, such as employers or financial institutions, does not match what you reported on your tax return. This discrepancy may increase or decrease your tax, or it may not change it at all. The notice explains the proposed changes to your tax return and the information used to determine them. This notice isn’t a bill, and you may be required to respond.
IRS CP14 Notice: The IRS believes you owe additional tax after processing your return. This is typically the first notice in the collection process. Interest and penalties may already be included. The IRS sends this notice when its records show a discrepancy, unpaid balance, or other issue requiring resolution. Common reasons include unfiled returns, unreported income, miscalculated payments, or outstanding balances from prior tax years.
IRS CP501 Notice: This follows an earlier balance notice (usually CP14) that was not paid, or a response was not received. Interest and penalties may continue accruing. The IRS sends this notice when its records show a discrepancy, unpaid balance, or other issue requiring resolution. Common reasons include unfiled returns, unreported income, miscalculated payments, or outstanding balances from prior tax years.
IRS CP503 Notice / IRS Notice CP171 Notice / IRS Notice CP187: This collection process has begun. The IRS has not received a response to prior notices, and enforcement notices will follow.
IRS Notice CP504: This notice is a Notice of Intent to Levy (Internal Revenue Code section 6331 (d)). If you don't pay the amount due immediately, the IRS can levy your income and bank accounts, as well as seize your property or your right to property, including your state income tax refund, to pay the amount you owe. Your account is generally still in the computer-driven notice stream (Automated Collection System or ACS) depending on the amount and complexity of the issue.
IRS Notice LT11/Letter 1058: These are serious escalations; final notice before levy action. The IRS intends to levy wages, bank accounts, and other property. Taxpayer may still have appeal or response rights. Depending on the amount, a Revenue Officer may be assigned. Significant collection actions are imminent. Resolution options may be limited. This is the equivalent of Defcon 1; collections are on and can be implemented without further notice.
IRS Notice NFTL: Notice of Federal Tax Lien (NFTL). An NFTL is a public notice saying that the IRS has a claim against your property. An NFTL can affect your ability to get credit. An NFTL applies to: Wages and income, Bank accounts, Business and personal assets (home and car), State tax refunds, Social Security benefits, or other assets or income. You may have the right to a Collection Due Process (CDP) hearing if you disagree with this decision.
CP242 notice: Your state tax refund was garnished to pay your federal taxes. You may have the right to a Collection Due Process (CDP) hearing if you disagree with this decision. Notice is not required before the action is completed.
IRS Notice Wage Levy: Your wages were garnished to pay your federal taxes. You may have the right to a Collection Due Process (CDP) hearing if you disagree with this decision. Notice is not required before the action is completed. The taxpayer may receive notice from their employer prior to receiving the notice.
IRS Notice Bank Levy: Your bank account was levied to pay your federal taxes. You may have the right to a Collection Due Process (CDP) hearing if you disagree with this decision. Notice is not required before the action is completed. The taxpayer may receive notice from their bank, creditors, or employees prior to receiving the notice.
Notice - The IRS can send additional letters and notices depending on the amount of the tax debt and also accelerate the collection process more quickly than the above list. It is recommended that the taxpayer seek professional assistance if they are unable to pay the tax debt. The notices and letters are not necessarily exhaustive. The IRS can modify its collection strategy at any time.