What to Do When a Letter Arrives
An envelope from the IRS raises the pulse of the most careful taxpayer, and most notices are routine: a figure that does not match a form, a payment not recorded, a question about one line. The dangerous responses are the two extremes — paying something that is wrong, and ignoring something with a deadline. Knowing which is which takes about ten minutes.
- By post, with a number:: Genuine notices arrive by mail and carry a notice or letter number identifying what they are.
- A deadline that matters:: Responding by the date stated preserves rights that are lost by ignoring it.
- Most are routine:: A mismatch with a reported form or an unrecorded payment accounts for the majority.
- Never by phone demand:: The agency does not call demanding immediate payment or threaten arrest, and does not ask for gift cards.
Where the AI summary above gets this wrong
"If the IRS contacts you, respond immediately and pay what they ask."
That's surface-true. Here's what it misses:
- A proposed adjustment is not a final one — Many notices propose a change based on information reported to the agency, and the information is sometimes wrong or incomplete — a basis figure omitted by a broker is the classic case. Responding with the correct figures within the deadline is the whole remedy, and paying instead concedes something that was not owed.
- The deadline is what preserves the rights — A notice proposing additional tax gives a period to disagree, and letting it pass generally converts the proposal into an assessment. That is the moment options narrow, and it is why the date on the letter matters more than the amount.
- Impersonation is aimed at exactly this anxiety — Calls demanding immediate payment, threatening arrest, or asking for gift cards or wire transfers are frauds, and they target older people deliberately. The agency's first contact is by post, and any doubt is resolved by ringing the published number rather than one supplied by the caller — the same verification habit that stops investment fraud.
01 Reading a genuine notice
Every notice carries a number in the top or bottom right corner identifying what it is. That number is the fastest route to understanding: each one has a published explanation of what it means and what response is expected.
The letter states what is being proposed or requested, the tax year, the amount, and the date by which to respond. Most concern a mismatch between what was reported on the return and what a payer reported separately, or a payment that has not been matched.
The first step is always to check the figures against your own records rather than to assume either side is right. A great many notices are resolved by sending the document that was missing, and a great many others by paying a small amount that was genuinely due.
02 Responding, and the deadline
Where you agree, the notice normally explains how to pay or what to sign. Where you disagree, it explains how to respond, and doing so within the stated period is what preserves the right to contest.
Keep it simple and documentary: a short letter saying which figure is disputed and why, with copies of the supporting documents, sent to the address on the notice and kept with proof of posting. Complex arguments help less than a clear document showing the correct number.
Where the amount is large or the position is genuinely arguable, professional help is worth the cost, and an authorised representative can deal with it directly. Where the amount is owed but cannot be paid now, the payment arrangements are a separate conversation and should not delay the response itself — the same separation that applies to any income question raised by a year's return.
Shows: the portion of a proposed assessment you believe is wrong, which is what responding within the deadline preserves. Ignores: interest and penalties accruing on any amount that turns out to be correct, the cost of professional help, and whether the underlying position is in fact supportable.
03 Telling a fraud from a notice
The agency initiates contact by post. It does not open with a phone call, a text or an email demanding payment, and it does not threaten arrest, deportation or the loss of a licence to force an immediate decision.
The payment method is the clearest signal. Nobody legitimate asks for gift cards, cryptocurrency, or a wire transfer to a named individual. Payments are made to the Treasury through published channels, and that never changes.
Where there is any doubt about a letter or a call, hang up or set the letter aside and ring the published number independently. And where a notice mentions a return you did not file, that is identity theft rather than a tax dispute, with its own procedure and its own free preventive measure.
Source: Tax scams and consumer alerts
Two sentences cover most of this. A real notice comes in the post, has a number on it, and gives you a date — so nothing has to be decided in the next ten minutes. And anyone demanding payment by phone, particularly with a threat attached, is not the IRS regardless of what the caller ID says. If a letter arrives, look up its number, check the figures against your own records, and respond by the date. That is the whole procedure.
FAQ
Does the IRS call people about unpaid tax?
First contact is by mail. The agency does not open with a phone call demanding immediate payment, does not threaten arrest, and never asks for gift cards or wire transfers.
What happens if I ignore a notice?
A proposal generally becomes an assessment once the response period passes, and options narrow considerably. Responding by the stated date is what preserves the right to disagree.
What if I agree the tax is owed but cannot pay?
Respond to the notice anyway, and deal with payment separately. Arrangements exist for paying over time, and delaying the response does not help the payment problem.
Sources
Regulator references
- Understanding your IRS notice or letter · Internal Revenue Service · 2026What a genuine notice looks like, what the number means, and how to respond.Last verified: 2026-09-07
- Tax scams and consumer alerts · Internal Revenue Service · 2026The recurring impersonation and refund schemes and how the agency actually contacts people.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.