Personal and business Tax

IRS Representation What to Do When You Receive a Notice

Receiving a letter from the IRS is a common source of anxiety. The instinct to set it aside and hope it goes away is understandable—but it is also the worst possible response. IRS notices carry deadlines, and missing them can result in penalties, loss of appeal rights, or enforced collection action.

This guide explains the most common types of IRS notices, what they mean, and how a CPA can help resolve them.

Common Types of IRS Notices

CP2000: Proposes changes to a return based on information reported by third parties (employers, banks, brokers). Often results from unreported income or incorrect withholding.

CP501/CP503/CP504: Collection notices for unpaid balances. Each escalates in urgency.

CP90/CP297: Final notices of intent to levy before seizure of assets.

Audit Notices: Inform you that your return has been selected for examination.

What to Do First

Do not ignore the notice. Read it carefully to determine what the IRS is asking for and the deadline for response. Many notices can be resolved with a simple written response or documentation.

If the notice proposes additional tax, do not assume the IRS is correct. Errors in IRS records are common, particularly with information matching.

How a CPA Helps

A CPA with unlimited representation rights (such as a Certified Public Accountant) can act as your authorized representative before the IRS. This means the CPA communicates with the IRS on your behalf, responds to notices, and negotiates resolutions.

Resolution options include:

  • Penalty abatement for reasonable cause

  • Installment agreements to pay over time

  • Offers in compromise to settle for less than the full amount

  • Currently not collectible status for temporary hardship

The Taxpayer Bill of Rights

The IRS Taxpayer Bill of Rights guarantees the right to be informed, the right to quality service, the right to challenge the IRS’s position, and the right to retain representation. A CPA exercises these rights on your behalf.

How Nova Tax & Accounting Services Can Help

Nova Tax & Accounting Services provides IRS representation and tax resolution services for individuals and businesses across Virginia and Washington DC. Our CPAs handle notices, audits, and collection matters.

For more information, visit https://novataxservices.com/ or schedule a free consultation.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Tax laws are subject to change, and individual circumstances vary. Consult a qualified tax professional for advice regarding your specific situation.