The Worst IRS Notices and Letters and What to Do if You Get One

It is a scary thing to receive a notice or letter from the Internal Revenue Service (IRS). Still, not all IRS letters are negative, as the IRS may need to verify your identity or correct your address. Some letters, however, can provide notice of serious issues.

Following are some of the worst notices or letters a taxpayer can receive. Note that all IRS Letters and Notices will be numbered – CP### for Notices and LTR### for Letters in the right top or bottom of the page.

IRS Notice of Deficiency (CP 3219A)

This Notice, or a similar letter, is often your first communication regarding an unpaid tax debt.   The IRS sends it to notify the taxpayer of a deficiency in a tax return.

Tax Account Assigned to Third Party Collection Agency (CP 40)

This Notice tells you that the IRS has referred your account to a collection agency. Typically, you will hear from the collection agency quickly after receiving this Notice.

Letter for Delinquent Return, Refund Hold (CP 88)

This notifies you that the IRS has put a hold on your tax refund because of unfiled returns from a previous year.

Letter of Intent to Seize Assets and Notice of Right to Hearing (CP 90)

This provides notice that the IRS intends to seize your assets, including bank accounts, real estate, individual property or wage garnishment.

 Final Notice and Intent to Levy (CP 504)— This Notice lets you know that the IRS may seize your tax refunds, bank accounts, and other assets. This Notice may also tell you that the State Department intends to or has revoked your passport.

Intent to Seize Your Property or Rights to Property (LTR 11/1058)

Letter 11 provides final notice that the IRS may seize your property for unpaid taxes. The Final Notice of Intent to Levy Property and Notice of Right to Hearing has almost identical wording and is Letter 1058.

What To Do if You Receive a Notice or Letter

1. Carefully read the Notice or Letter and act as requested, such as providing information or contacting an agency.
2. If possible, pay the tax debt. If you cannot pay the entire debt, you can make an Offer in Compromise or an Installment Agreement.
3. Avoid scams—verify your Letter or Notice is authentic.
4. Seek help if you need assistance.

The tax professionals at Highland Tax Resolution can assist you in resolving even the worst sorts of tax Letters and Notices.