Most Common IRS Notice and Letter Types

June 15, 2021 by Samantha Lamb
Woman reading a letter

When most people think about a notice from the IRS, their first thought is that all IRS notices are audits. However, there are actually hundreds of different types of letters and notices you can receive from the IRS. In this blog, we will focus on a few of the more common IRS notice types that our audit defense members typically see. Even if it is not discussed here, we want you to contact us about any and all notices you may receive.

First, to determine what type of notice you have, look in the upper right or lower right corner on the first page of the letter. If you still are unsure and are a member with us or want to use our services, please contact us right away and we can help you figure it out!
 

CP2000

One of the most common notices that our audit defense members receive is a CP2000. These notices are computer-generated and issued when the IRS receives records that do not match what you reported on your tax return. This notice will propose changes based on those discrepancies. If you receive one of these notices, your tax professional will ask you for supporting documentation to verify if the differences that the IRS is showing are correct or not. If they are not correct, your tax professional will respond to the IRS to dispute the changes to your tax return.
 

Earned Income Credit (EITC) Notices

In addition to the CP2000, notices regarding Earned Income Credit (EITC) are another type of frequently issued notice seen by our audit defense members. The IRS issues this notice type to verify the dependents and household situation you reported on your income tax return. Sometimes, when these notices are issued, your refund may be partially or totally frozen until supporting documents are provided. After you report your notice to us and are assigned to a tax professional, they will help you understand what supporting information to gather. From there, they will create and send a response to the IRS to verify the information on your return.
 

Notification of Audit

Among the more common letters you may receive from the IRS is one notifying you of an audit. Audits tend to be more complicated than other types of notices because an IRS Examiner is looking at your return to verify the information you have reported. Common areas that are audited are itemized deductions, expenses for a small business, or income from rental properties. It is very important to make sure your records are intact and ready to prove the numbers you claim on your return. Your tax professional will do a thorough review of your letter and your return and work with you to respond to the IRS.

The risk of being audited is uncertain. What is certain is that you will not find a better deal out there than a pre-paid audit defense membership. If you use TurboTax to prepare your taxes, you can purchase audit defense as a bundled service within the TurboTax program. Audit Defense can also be bought as a stand-alone service. For more information about the benefits of our audit defense program, visit: https://www.taxaudit.com/prepaid-audit-defense.

For more examples of notices and letters from the IRS or State Agencies, click here.

Recent Articles

Inheritance Tax
Whether you will be taxed on the money received from a trust will depend on the type of trust and the instructions laid out, the assets titled, and more.
Gold Bullion
You are responsible for paying the taxes on the amount realized in the sale. The buyer is generally not required to withhold income taxes on the proceeds.
Tax Extension
As taxpayers, we are personally responsible for filing our returns both on time and accurately. Failure to do one or both can result in significant penalties.
Concerned couple looking over finances
Generally, the IRS has ten years from the date tax is assessed to collect a delinquent tax liability. However, the answer is not that straight forward.
This blog does not provide legal, financial, accounting, or tax advice. The content on this blog is “as is” and carries no warranties. TaxAudit does not warrant or guarantee the accuracy, reliability, and completeness of the content of this blog. Content may become out of date as tax laws change. TaxAudit may, but has no obligation to monitor or respond to comments.