Hawai'i Federal Tax Clinic

Approved United States Tax Court Clinical, Student Practice & Calendar Call Program

1001 Bishop St. | near Hawai'i Capital Historic District | Suite 2685A | Honolulu, Hawai'i 96813 | +1 (808) 202-2274

Hawai'i Federal Tax Clinic

Serving the islands of Kaua'i, o'ahu, moloka'i, lana'i, mau'i and hawai'i

IRS Letters | (808) 202-2274

Understand What Your IRS Notice Means & What to Do

Nothing can make your blood run cold more than receiving a letter from the IRS. There are around 75 different notices and IRS letters. It could be Letter 3228 (LT39) Reminder Notice letter or it may even be the IRS sending you Notice number CP12 which outlines Changes to Tax Return, Overpayment. The IRS may send letters via regular mail or through certified mail. When the IRS sends through certified mail it can mean that the notice is in regard to a highly time-sensitive issue. Letters from the IRS describe quite clearly why they are contacting the taxpayer and include guidance on how to handle the issue. The IRS usually sends out letters or notices if:

There was an error or omission on your tax return, and additional tax payment is required
There was an error, and you are owed a greater refund
The IRS requires additional information regarding your tax return

How to Identify the Letter from the IRS

The IRS assigns a number to every notice that leaves their office. It helps IRS employees track correspondence from thousands of citizens. Some notices come with a CP designation. The IRS prints the CP (Computer Paragraph) at the top of the first page of the notice. There is also a corresponding CP number on the removable portion of the page. It helps users to retain a portion of the notice for their records. The IRS usually places the CP number in the header of the notice, at the top and center of the page.

What to Do if You Receive a Letter from the IRS

Most letters from the IRS contain specific instructions to help complete your tax return. Each notice or letter will require some action on your part. After reviewing mail from the IRS, it is essential to compare the information received from the IRS to the information that you provided to them during the period in question. If there is a discrepancy, then this should be brought to their attention. When an error has been made and additional payment is required direct correspondence and payment can be submitted directly to the address on the notice.

When submitting any information to the IRS or to any company for that matter, it is good practice to keep copies for your own records.

Some of the more common letters from the IRS include:

CP 88 - Deliquent and Return Refund Hold

This notice is used to notify the taxpayer that the IRS is holding their tax refund because they have unfiled tax returns for a different year.

This is generally the first notice that is sent after taxes are filed and there is still an outstanding balance.

CP 501 - Reminder Notice - Balance Due

This is the first or second notice that you will receive from the IRS if you have an overdue account.

CP 503 - Second Request - Balance Due

If you have not paid the balance of your account you will receive a second notice.

CP 504 Final Notice & IRS Intent to Levy - Balance Due

If the amount is not paid in full this is the 3rd and final notice before the IRS gets serious and start searching for assets to levy.

CP 523 - Intent to Terminate Your Installment Agreement & Seize Your Assets

This is the notice that the IRS sends prior to terminating your installment agreement with the IRS. If no action is taken, the IRS may levy your wages, garnish your bank account or seize other assets. Understand the details of this notice and what actions can be taken to fix the problem.

CP 90 - Intent to Seize Assts and Notice of Your Right to a Hearing

This IRS letter is a notification that a levy will be put against assets and any retirement benefits, salaries, real estate, automobiles, bank accounts etc can also be included in the levy.

CP 297 - Intent to Seize Assets and Notice of Your Right to Hearing

This notice is similar to the CP 90, but it is sent to your business. This is a notification that due to unpaid taxes the IRS intends to levy.

LT 1058 - Final Notice of Intent to Levy and Notice of Your Right to Hearing

The IRS has likely made numerous attempts to collect by the time the taxpayer receives this notice. If no action is taken within 30 days, the IRS has the right to levy or seize assets.

LT 11 – Intent to Seize Your Property or Rights to Property

The IRS hasn’t received any payment for overdue taxes and they intend to seize assets if no action is taken. The IRS may also place a lien on your property.

CP 22A – Notice of Change(s) to Your Tax Return

Based on the information you provided the IRS, your tax return was changed and you now owe money.

CP 3219A & Form 5564 – IRS Notice of Deficiency

Understand what the IRS notice of deficiency means. Should you sign the form 5564 that is attached to agree to the new assessment? Know what to do if you do not agree with the notice and what to do if you cannot pay the balance that is now due.

CP 508c – Possible Revocation or Denial of Passport

This letter will be sent to taxpayers starting in January 2018 if the IRS has determined that their account is “seriously delinquent”. The IRS has provided that information to the State Department. Generally, the state department will not renew your passport or issue a new passport after receiving this certification. They may also revoke or place limitations on your current passport.

CP 2000 – Notice of Underreported Income

The IRS will send this letter when their records don’t match what you reported on your tax return. The letter will contain IRS proposed changes. It is not an audit. If you agree with the proposed changes or disagree, mark the response form accordingly and send it back to the IRS. Read more about this letter and what to do by utilizing the link above.

IRS Letter 1153 & Form 2751: Proposed Assessment of the Trust Fund Recovery Penalty

The IRS sends this letter to individuals about the Trust Fund Recovery Penalty. Typically, the IRS sends this letter when a business has refused to pay the payroll taxes, and the IRS has decided to hold you responsible for the debt. Form 2751 is an enclosed form agreeing to the assessed amount.

Serina Moy E.A.,, advises pro bono reps and clients on IRS procedures and the IRC.