Jun 1

Jun 1 notices + letters from the IRS: why so many and what to do

IRS notices and letters have become significantly more common in the last few years, especially during the pandemic. This blog is going to break down why that is, what the different letters mean, what to do and if you should panic.

Common reactions from IRS letters + notices

First of all, the reaction that people tend to have towards mail from the IRS is complex and completely valid. We can also all agree that the feeling is always negative, it just depends on how negative. From minor irritation to fears of owing thousands of dollars, being audited or going to jail. It makes sense that people will generally jump to those conclusions because we hear absolute nightmares all the time. Then, throw in financial insecurity, how complex and confusing taxes are and that the IRS incredibly intimidating. Taxpayers are required to file forms they don’t understand, pay in taxes they don’t know how to calculate, on time, every year, always.

Having a professional on your team is ideal when it comes to dealing with the IRS, however that’s not always possible or necessary.

What is a letter vs a notice?

There is a difference between an IRS letter and Notice. The document will clarify in the header and the most common letter is a LTR12C and most common notice is a CP2000.

A letter is a request for information to confirm what you’ve reported. A common letter is to provide W2’s to prove your withholdings or information on your health insurance if you received a premium tax credit.

Unanswered letters, will result in a return to sit in limbo unprocessed. Therefore, if you have a refund it will be on hold OR could result in a failure to file penalty.

A notice is advising you of changes or a correction to your return.