What Does the IRS Send Notices For?

IRS notices can often be confusing, with strange coding and lengthy, unclear explanations of what they mean. It’s stressful enough getting a notice that you owe the IRS money, but having to decipher why you owe money and what you should do seems unfair.

IRS Shield has you covered! In this article, we look at what some of the most common types of IRS notices mean and actionable steps to take after receiving each notice.

Types of IRS Notices

The IRS has several different types of notices that they commonly send. The notices are always identified with a code. Notice codes start with CP, while letter codes start with LTR. Some of the most common letters and notices sent from the IRS include:

  • Notice of Proposed Adjustment (CP2000)
  • Notice of Balance Due (CP14)
  • Reminder of Balance Due (CP501, CP502)
  • Intent to Levy Notice (CP504)
  • Intent to Seize Assets and Notice of Your Right to a Hearing (CP90)
  • Refund of Overpaid Taxes (CP12)
  • Changes to 1040, Math Error (CP11)

This section looks at a brief overview of each type of notice and actionable steps to take when receiving said notice.

Notice of Proposed Adjustment – CP2000

If you receive a CP2000 notice from the IRS, it means that there was a difference between the income that you reported on your federal tax return and the income reported to the IRS by third parties. This is an automated notice and is therefore not double-checked by an individual.

The CP2000 comes with instructions and a response form. On the form, you can dispute or agree with the discrepancy. It’s important to complete the response form within the allotted time frame, or else you may lose your opportunity to dispute the information.

Read the article What is a CP2000 Notice to learn more about the details of the notice and how to respond to the IRS.

Notice of Balance Due – CP14

A CP14 notice is the IRS informing you that you have an unpaid balance and you need to pay it. You’ll typically receive a CP14 if you reported that you owed taxes on your tax return but have not paid them.

If you agree with the information on the notice and have the money to pay your balance, you should do so immediately to avoid further penalties. However, if there is a discrepancy or you are unable to pay the balance, you should work with the IRS to get the error corrected or set up a payment plan. For further details on action items, check out What is a CP14 Notice.

Reminder of Balance Due – CP501 & CP502

The CP501 is very similar to the CP14 in that it lets you know that you owe the IRS money. Most people with an outstanding balance will receive a CP501 and a CP14.

The CP502 is a second reminder that you have an outstanding unpaid tax balance. If you receive this notice and have already paid your balance, it’s essential to contact the IRS to confirm that you’ve made payment.

Intent to Levy Notice – CP504

You will receive a CP504 if you have received a notice from the IRS stating an unpaid balance and failed to either set up a payment agreement or pay the balance. The CP504 is also known as “the final notice” and informs you that the IRS intends to levy your state tax refund.

At this point, if you have not already, you should work out an agreement with the IRS. Read an Overview of Tax Debt Relief Options for the best way to proceed.

 Intent to Seize Assets and Notice of Your Right to a Hearing – CP90

If you don’t have a state refund or it’s not enough to cover your unpaid balance, the IRS will send you a CP90. The IRS will start taking money from your paychecks, bank accounts, or even physical property if the balance remains unpaid.

If you receive a CP90, you should contact a professional. IRS Shield is here to help walk you through your options and work with the IRS on your behalf to get you the best possible outcome. Sign-up for our service to get professional support ASAP.

Refund of Overpaid Taxes – CP12

A CP12 is one of the few good notices that you can receive from the IRS. It is essentially the IRS version of “bank error in your favor.” It means that the IRS has made a correction to your tax return that resulted in either you receiving a larger refund or less money owed.

As long as you agree with the correction, you don’t need to do anything! You should receive a check in the mail from the IRS in 4 to 6 weeks for the overpayment or additional refund.

Changes to 1040, Math Error – CP11

The CP11 is sent from the IRS when a math error is identified on your tax return, but it results in you owing more in taxes to the IRS. Essentially it is the exact opposite of the CP12 notice.

As long as you agree with the correction, all you need to do is pay the owed balance to the IRS. You do not need to submit an amended tax return.

Additional Information on IRS Notices

While we’ve only covered some of the most common notices from the IRS in this article, there are several other notices that you can receive from the IRS. For additional information on how to handle IRS notices, read:

For complete peace of mind, make sure to sign-up for an IRS Shield Membership. With a membership, you get help walking through all of your options when responding to a notice, and we will even respond to several common IRS notices on your behalf. All of this is included for a fraction of the cost of hiring a personal tax accountant!