Receiving a tax notice from the IRS almost immediately incites fear in most taxpayers. First, it's important to understand that there are many types of communication from the government tax agency that may ask for additional information and will not result in an audit. But regardless of why a taxpayer receives a notice from the IRS, it's important to take all correspondence seriously and not ignore the document.

First, determine what the notice is for and what actions must be taken to satisfy the request. Collection process numbers listed in the top right-hand corner of your letter will determine the reason for the correspondence, so it's important to pay attention to these figures. For example, CP-12 denotes a miscalculation on your return, while CP-14 means you owe unpaid taxes.

The IRS routinely sends out notices asking taxpayers to make corrections to their income tax forms or supply additional information about a certain listing, according to These inquiries can be cleared up fairly simply and may even list the instructions for completing the request on the form.

In other cases, you may want to take a closer look at your return and enlist the help of your tax preparer to clear up more serious infractions. For example, if you receive correspondence with CP-504 listed, this is a final reminder of a balance that is due - and a notification that the seizure of your state income tax refund is imminent, the news source explains. The IRS may also choose to send a notice (CP-523) if you have defaulted on your installment payments and the agency plans to seize your assets.

When you receive a letter from the IRS for any type of infraction, it is important to double check your return against the information the tax agency listed. If you discover you are in the wrong, follow the directions listed on the correspondence to clear up any unpaid balances. But if you find that the agency may be wrong or you do not fully understand the notice, it is crucial to contact your tax preparer immediately for clarification.

Regardless of the reason, act quickly to resolve the issue before you receive any additional correspondence. Resolving the problem will give you piece of mind. 


About Liberty Tax Service®
Liberty Tax Service® is the fastest -growing retail tax preparation company in the industry’s history. Founded in 1997 by CEO John T. Hewitt, a pioneer in the tax industry, Liberty Tax Service® has prepared over 8,000,000 individual income tax returns. With 42 years of tax industry experience, Hewitt stands as the most experienced CEO in the tax preparation business, having also founded Jackson Hewitt Tax Service.

Liberty Tax Service® is the only tax franchise on the Forbes “Top 20 Franchises to Start,” and ranks #1 of the tax franchises on the Entrepreneur “Franchise 500.” Each office provides computerized income tax preparation, electronic filing, and online filing through eSmart Tax.