Receiving a letter from the IRS can be intimidating, especially if you’re unsure what it means or how to respond. But not all IRS notices are bad news. Some are routine communications, others flag issues requiring attention, and a few may even contain good news, like refund updates.
Understanding the different types of IRS notices can help you take the right action quickly, avoid penalties, and reduce stress
What Is an IRS Notice?
The Internal Revenue Service (IRS) sends notices to taxpayers to communicate about issues related to their tax returns. These notices serve as official correspondence and may cover topics such as adjustments to your return, requests for additional information, or alerts about unpaid taxes.
An IRS notice can range from a simple reminder to a warning of impending legal action. Understanding these notices—and what each code means—can help you respond effectively and avoid unnecessary stress.
Why You Might Receive an IRS Notice
There are several common reasons why the IRS might reach out to you. Here are a few:
- Balance Due: You owe money to the IRS from a prior tax year.
- Information Verification: Your return includes figures that don’t match IRS records.
- Audit Notification: You’ve been selected for an audit.
- Missing Documentation: The IRS needs additional forms or documentation.
- Identity Verification: There may be a potential identity theft concern.
- Changes Made by the IRS: The IRS made corrections or changes to your return.
Each notice will specify the issue and what action, if any, is required from you.
Most Common Types of IRS Notices
While the IRS sends many types of notices, a few are particularly common:
CP2000 – Proposal to Adjust Your Income, Deductions, or Credits
The CP2000 is one of the most common IRS notices and often confuses. It’s not an audit, but rather a proposed adjustment based on income information the IRS received from third parties (such as W-2s, 1099s, or other statements) that doesn’t match what you reported on your tax return.
What does it mean:
The IRS believes you may have underreported income, misreported deductions, or claimed credits incorrectly.
What to do:
- Review the notice carefully and compare the IRS’s proposed changes to your tax return.
- If you agree, follow the instructions to sign and return the response form with payment, if applicable.
- If you disagree, respond with documentation supporting your position by the deadline listed.
CP501 / CP503 – Reminders About an Unpaid Tax Balance
The CP501 and CP503 are part of the IRS’s series of notices about unpaid tax debt.
- CP501 is the first reminder that you owe the IRS money.
- CP503 is a follow-up reminder sent if the IRS hasn’t received a response or payment after CP501.
What does it mean:
You have a balance due with the IRS that hasn’t been paid.
What to do:
- Pay the amount due by the deadline to avoid interest and penalties.
- If you can’t pay in full, explore options like a payment plan or an Offer in Compromise.
- Contact a tax professional if you’re unsure how to proceed.
LT11 – Final Notice Before IRS Levy Action
LT11 is a final warning from the IRS before they begin collecting your unpaid taxes through levy actions, such as garnishing wages or seizing assets.
What does it mean:
You have an unresolved tax debt, and the IRS intends to take enforced collection action.
What to do:
- Do not ignore this notice — it is time-sensitive.
- Pay the full amount immediately or contact the IRS to arrange a resolution.
- You have the right to request a Collection Due Process (CDP) hearing if you act by the deadline.
- It’s strongly advised to consult a tax relief professional if you receive this notice.
CP504 – Notice of Intent to Levy State Income Tax Refund
The CP504 notice notifies you that the IRS plans to seize your state tax refund and may take additional collection actions if your federal tax debt remains unpaid.
What does it mean:
This is a serious escalation in IRS collection efforts.
What to do:
- Pay your tax debt immediately to avoid further levies.
- If you dispute the debt or need more time, contact the IRS or a tax professional.
- You still have appeal rights — act quickly to preserve them.
Notice 1444 – Confirmation of Stimulus or Economic Impact Payment
Notice 1444 is sent to confirm that the IRS issued your Economic Impact Payment (stimulus check) and when it was sent.
What does it mean:
This is an informational notice confirming that you should have received a payment.
What to do:
- Keep this notice for your records — it may be needed when filing your tax return.
- If you didn’t receive the payment, you may need to claim the Recovery Rebate Credit on your next tax return.
Breaking Down IRS Notice Codes
IRS notices typically begin with a code, such as CP or LT, followed by a number. These codes help categorize the type of communication.
- CP (Computer Paragraph): These notices are system-generated based on tax return discrepancies.
- LT (Letter Template): These are typically more serious and may involve collections or legal enforcement.
Understanding the code at the top of your letter is the first step in knowing how to respond.
Examples of Common IRS Notices
CP2000 IRS Notice
One of the most common notices, CP2000, alerts you when the income reported on your return doesn’t match information the IRS received from employers or financial institutions. This notice is not a bill but a proposal to adjust your return.
What to do: Review the notice, compare it to your records, and respond by the due date. You can agree or dispute the proposed changes.
CP501 and CP503
These are reminders that you owe the IRS. CP501 is the initial notice, while CP503 is a follow-up.
What to do: Make a payment or contact the IRS to set up a payment plan.
LT11
This is a final notice before the IRS initiates a levy on your assets.
What to do: Act immediately. You have the right to request a hearing within 30 days.
Notice 1444
Sent to confirm the amount of your stimulus payment or economic impact payment (EIP).
What to do: Keep this for your records. If the amount is incorrect or missing, contact the IRS.
For more examples and tax help, check out the Tax Relief Helpers blog.
What to Do If You Receive an IRS Notice
Getting a letter from the IRS can cause stress, and if you’re not able to understand the full implications, seek professional help.. Follow these steps
- Read the Notice Carefully: Understand what the IRS is saying and what action is needed.
- Verify the Details: Check the notice against your tax return and financial documents.
- Respond Promptly: Delays can result in penalties or increased scrutiny.
- Contact the IRS: If you need clarification, call the number listed on the notice.
- Seek Professional Help: If the issue is complex, consider hiring a tax expert, such as Tax Relief Helpers
When to Contact a Tax Professional
Not all notices require professional help, but certain situations do. Here’s when to seek assistance:
- You’ve received a CP2000 and don’t agree with the proposed changes.
- You’re facing a levy or lien (e.g., LT11 or CP504).
- You’re being audited.
- The notice involves multiple tax years or large amounts owed.
A tax professional can ensure your response is accurate and timely, potentially saving you money and legal hassle.
How to Avoid Future IRS Notices
While some notices are unavoidable, you can reduce the chances by:
- Filing Accurately: Double-check all entries and documentation.
- E-Filing: Electronic filing reduces errors.
- Updating Information: Notify the IRS of any address or name changes.
- Paying On Time: If you owe taxes, pay promptly or set up a payment plan.
- Keeping Records: Retain documents related to income, deductions, and credits.
Receiving an IRS notice can be intimidating, but understanding the type of IRS notices and what each one means helps you stay in control. Whether it’s a CP2000 IRS notice or a more urgent LT11 letter, staying informed and responding appropriately is key.
If you’re unsure about how to handle a specific notice, don’t wait—contact a tax relief expert for personalized support.
Frequently Asked Questions
What is an LT40 notice from the IRS?
The LT40 notice informs you that your tax account is under review due to possible identity theft. The IRS may ask you to verify your identity before processing your return.
What to do: Follow the instructions in the letter to confirm your identity, either online or by phone.
What is a 971 notice from the IRS?
The 971 code appears on your IRS transcript and usually refers to additional actions on your account, such as the issuance of a notice or a collection activity.
What to do: If unsure about the context, request your full transcript and speak to a tax professional.
What is a CP210 notice from the IRS?
The CP210 informs you about a credit or adjustment made to your business account. This is often related to employment taxes or estimated payments.
What to do: Review the credit or adjustment carefully and reconcile it with your records.
What do codes 570 and 971 with different dates mean?
Code 570 indicates that your return is being held for additional review, usually due to verification issues or errors. Code 971 could refer to the IRS sending you a notice or initiating further action.What to do: Wait for the notice indicated by code 971. If the issue persists, contact the IRS or consult a tax specialist.
Written by: Thomas Brooks
Published: July 14, 2025