IRS Letters and Notices

Each year, the IRS sends millions of these computer-generated notices and letters to taxpayers for a variety of reasons. If you find one in your mailbox, don’t panic. Often just responding to the notice will take care of further issues. Contact Advantage Tax Relief Inc at (630) 773-3200 or through our online form to request help. Don’t delay, as you typically have 30 days to respond to your IRS notice or letter. We are a local, family-owned business.

The CP2000 typically includes a summary of everything the IRS has associated with your Social Security number. It is our experience that since the notice is computer-generated, the amount that the IRS claims you owe may be wrong. At times it might work in your favor, but having us review the notice and prepare an amended tax return will work out better than the IRS’s proposed balance due.

A great example is a stock sale which was reported to the IRS that you failed to include on your return because the financial institution was late in getting it to you. The IRS will have on record the amount of stock that was sold but may not have the cost basis (what you paid for it) and transaction fees. So, you could have sold $10,000 in stocks with the IRS considering the entire amount as a gain and taxable income when this may not be the case. It could be a loss where you get an additional refund!

CP2501 Notice, Initial Contact Letter: This IRS notice is similar to the CP2000. The difference is that it does not have a proposed balance due. It requests clarification on the differences between your tax return and information in the IRS database.

The best advice is to contact us. We will order a transcript of your tax return and account that will show all the information the IRS has associated with your Social Security number. We can then review the transcript and your tax return and work with you to provide clarification.

Letter 2205-A: This IRS letter informs you that your tax return is being examined. The letter will provide the IRS agent’s name and contact information along with the areas of your tax return to be examined. Don’t be fooled that only selected sections of your tax return will be audited. If the IRS agent suspects fraud, they can easily open up the entire tax return for examination.

CP22E Examination Adjustment Notice: This is the follow-up letter from the IRS after an audit (either correspondence or field). It will include the details or findings from your review or audit with the amount of unpaid tax due along with penalties and interest. You have 30 days to respond to this notice.

Letter 2625C, 2526C: This is a common letter from the IRS that is also known as the 30-day letter. You will have 30 days to agree or appeal the findings. It will provide the balance due and instructions on the steps to take - either agree or appeal. 

Letter 3219 Notice of Deficiency: This is the follow-up letter after your appeal or non-response to the 30-day letter. This letter is also known as the 90-day letter. This is your last chance to either pay or petition the tax court within 90 days from the date of the letter. This letter informs you of the amount of tax due.

The appeals process typically has expired once this letter is issued, and if you fail to respond, the IRS will file notices that it intends to levy your assets.