You received an IRS letter — what to do (and what NOT to do) before panicking.

It arrives in a plain white envelope with a distinct government logo in the top left corner. Your heart drops, and your mind immediately jumps to worst-case scenarios involving asset seizures or intensive forensic audits. Take a breath. Every year, millions of automated notices are sent out, and the vast majority have simple, clerical explanations.

Read the Notice Code

Every official IRS letter has a specific notice or letter number printed on the top or bottom right corner (common ones include CP2000, CP14, or Letter 525). This code tells you exactly what the issue is. It could be as minor as a correction to a math error made on your return, a request to verify your business address, or a notification that a form was missing a signature.

What NOT to Do: The Danger of Silence

The absolute worst thing you can do is slide the envelope under a stack of papers and pretend it doesn't exist. IRS notices always come with strict deadlines—usually 30 days. If you ignore a notice stating they adjusted your tax balance, that adjustment becomes final, and the automated collection process begins, leading to unnecessary liens or levies.

Your Action Plan

Review the letter against your accounting records for that specific tax year. If the IRS is correct about a missing payment or discrepancy, pay the balance or request a payment plan immediately. If you disagree, you have the right to construct a formal written response with supporting financial documentation to dispute the claim.