Why Did the IRS Send You a Certified Letter?

Why Did the IRS Send You a Certified Letter?

The IRS uses certified mail for specific notices that often concern IRS collections. However, a certified mail IRS letter doesn't always mean the IRS is seizing your assets or levying your bank account. It's mostly a warning that if you don't take action, the IRS may take these measures.

The IRS generally doesn't use certified mail for routine notices. It's used when the agency needs legal proof that you received the notice, usually when there is a specific deadline or when your hearing or appeal rights begin. These notices require your immediate attention.

Talk to Wiggam Law anytime you get a certified letter from the IRS. We're here to help you get on top of your debt or other tax issue, and fast – learn how our representation services can help you.

Key Takeaways

• The IRS uses certified mail for notices that start a legal deadline or appeal right, not routine balance-due or reminder letters.
• Certified mail is serious: a clock is running, and it starts on the letter's date, not when you receive it.
• The most common certified notices are levy notices (LT11/1058, CP504), the Notice of Deficiency (CP3219A), and lien notices (Letter 3172).
• Ignoring one IRS notice can trigger the next enforcement step. Identify the notice, and act quickly, before the deadline.
• Talk to a tax professional when you're not sure what to do with an IRS certified letter.

Why Does the IRS Use Certified Mail?

The IRS uses certified mail to deliver some notices for the following reasons:

• Proof of mailing: It has a purpose–to provide legal proof of delivery.
• Statutory requirements: Sometimes tax laws require this step before the IRS can enforce certain collection actions, such as levying.
• Clock starts for deadlines: It also starts the clocks for the Tax Court and Collection Due Process. Deadlines start from the date on the letter, not the day you receive it.

When the IRS sends certified mail to meet a statutory requirement, it generally only has to send the letter to your last known address. Alternatively, the agency may be able to meet its statutory requirement by hand-delivering the letter to your last known address or place of business. It typically can't use regular mail to meet this type of legal requirement.

Notices Sent Via Certified Mail

Which notices are usually sent via certified mail? Here are the most common:

• CP504 or CP504B, Notice of Intent to Levy: This is the final notice for individual CP504) or business (CP504B) taxes. The IRS can seize tax refunds and may move forward with seizure notices.
• CP90 or CP297, Final Notice of Intent to Levy: These are two of the final notices the IRS may send before it levies assets like wages, bank accounts, and property. You have 30 days to request a Collection Due Process (CDP) hearing.
• LT11, Final Notice of Intent to Levy: This is another final levy notice that gives you 30 days to act before the IRS seizes your property or rights to property.
• Notice CP3219A or Letter 3219, Notice of Deficiency: One of these notices is sent when the IRS is proposing changes to your tax return. You have 90 days to file a petition if you disagree with the findings.
• Letter 3172, Notice of Federal Tax Lien: This letter alerts you that the IRS has filed a federal tax lien for your unpaid taxes, and you have the right to a CDP hearing within 30 days.
• Notice CP523, Intent to Terminate Installment Agreement: The IRS sends this notice when you have defaulted on your payment plan, to inform you of their intent to terminate your installment agreement and seize (levy) your assets. If you don’t respond in 30 days, the IRS terminates your agreement, and after another 30 days, the IRS can levy if you don’t respond.
• Letter 2205 or 3572, audit initiation: This is a notice that your tax return was selected for an audit.

The certified letters from the IRS are different from adjustment and collection notices that the agency sends using regular mail. You may receive the following through regular mail:

• Notice CP14: This notice simply informs you of your unpaid taxes.
• CP501: This is a reminder of your pending tax balance.
• CP503: This is the second reminder of your balance due.
• CP2000 notice series: The IRS sends these notices to inform you of a mismatch between the income you reported and what third parties reported.
• CP21 / CP22 / CP23 / CP24: These are return adjustment notices.
• CP30: The IRS sends this notice if you owe penalties for underpayment of estimated taxes.

These letters notify you of an outstanding balance, an error, or a bill reminder. While they deserve your attention, they aren't as urgent as the certified letters. However, responding to these notices can help prevent escalation to certified letters.

Here’s a summary of some IRS notices and what they mean:

Notice/Letter	Certified?	What it means	Deadline	Link to learn more
Final Notice of Intent to Levy: LT11, Letter 1058, CP90, CP297, CP91	Yes	Last notice before the IRS may levy assets + rights to a CDP hearing	30 days	Guide to LT11 LT1058 overview SS garnishment related to CP91
Notice of Intent to Levy state tax refund: CP504, CP504B	Sometimes	The IRS will levy your state tax refunds and will move forward with other levies	30 days to prevent additional notices	What is the CP504 notice? What is a CP504B?
Notice of Deficiency: CP3219A, CP3219N	Yes	The IRS proposes tax return changes or an assessment in a year you didn't file	90 days, 150 days if out of the country	Guide to notice of deficiency
Notice of Federal Tax Lien: Letter 3172	Yes	The IRS has filed a federal tax lien against you + how to request CDP hearing	30 days	Guide to federal tax liens
Intent to Terminate Installment Agreement: CP523	Yes	Notice that you have defaulted on your installment agreement	30 days to terminate the agreement	CP523: how to respond
Audit initiation: Letter 2205, 3572	Regular mail is then upgraded to certified if there is no response	Notice that your tax return will be audited	7 to 30 days (to make examiner contact or to respond)	Audit notice guide

Is a Certified Letter from the IRS Always Bad?

Certified mail is more serious than regular mail when dealing with the IRS. However, it's not always catastrophic. It's just time-sensitive. For example, a Final Notice to Levy does no harm; you can still make payment arrangements and stop the levy. It's ignoring the notice until the appeal window, which is bad because it could result in a bank levy or wage garnishment.

What to Do When You Receive a Certified Letter from the IRS

Acting quickly but carefully will give you the best outcome with an IRS certified letter. Take these steps if you receive one in the mail:

Open immediately

Don't put this letter in a stack of mail to be dealt with later. Open it right away to see what the issue is. The notice number will be in the top-right corner, which indicates what type of notice it is and why you're receiving it.

Find the deadline

Next, find the deadline for taking action. This could be 30, 60, or 90 days, depending on your situation.

Read it thoroughly

Read through the notice carefully. Make sure you understand what the problem is, why the IRS is sending the notice, and what you need to do next to resolve the issue.

Create a plan

Don't delay in creating a game plan. If the information is incorrect, you may need to file an appeal or request a hearing. If you can pay off your debt, do it fast. You can also set up an installment agreement to avoid collections while you pay off your balance.

Contact a Tax Professional

A tax expert can help you with a range of tax resolution options, from filing an appeal or hearing request to applying for a payment plan or offer in compromise. It's especially important to work with a professional when you don't understand what your notice means.

How to Identify Real IRS Certified Letters vs Scams

It's important to be on the lookout for tax scams. Identity theft is on the rise, and scammers are going the extra mile to get your financial or personal information. Here's how to tell the difference between a real IRS letter and a fake:

• Real IRS notices will include a notice number, the last four digits of your Social Security number, and the IRS return address. Verify the notice number on the IRS website.
• The IRS will never email or text you to demand payment or make threats.
• The IRS does not make aggressive threats, like immediate arrest or deportation. The IRS must follow a set legal process with notices.
• The IRS does not demand payment through gift cards, wire transfers, or cryptocurrency.
• Scams often include suspicious links with misspelled words or non-government websites.
• Real IRS notices provide clear details about why you are receiving the notice.

A good indicator that the letter or contact is a scam is that you haven't heard anything about owing taxes, and the IRS is suddenly threatening arrest. The IRS doesn't work this way, especially if the contact happens through social media, email, or a group text message. The IRS must send you notices that alert you to your outstanding balance before taking any action, such as seizing your property or charging you with crimes.

But when in doubt, always consult a tax professional – you can never be too safe with your personal information.

When to Call a Tax Attorney

A certified letter from the IRS often means you need to act quickly to avoid a serious IRS action, such as a levy or lien. Contact an attorney if you receive a notice that you don't understand or a notice that involves asset seizure, deficiency, audits, or business tax. The help they provide is well worth the cost of their fees when you're dealing with a high balance or a complicated case.

At Wiggam Law, we can help evaluate your IRS transcripts, decide what the best course of action is, and help you execute it. Schedule a consultation with us so we can help you fix your IRS problems. When it comes to certified notices, time is the enemy. The longer you wait, the greater the risks.

Frequently Asked Questions (FAQs)

Here are the common questions we get on certified mail:

What happens if I ignore a certified letter from the IRS?

It could lead to a filed tax lien, additional tax, interest, and penalties, bank levy, and wage garnishment. It really depends on which certified letter you ignored.

Does an IRS certified letter mean I'm being audited?

Not always; though some certified letters may be audit notices, the IRS also sends other notices, such as an intent to levy or a termination of an installment agreement, through certified mail.

Do I always have to open a certified IRS letter?

Yes, always open any notices or letters from the IRS. The IRS will take the intended action whether you open the letter or not, as long as it was delivered. Before you take any action, check for signs of fake IRS communications, such as misspelled links or aggressive demands.

What if I miss the deadline on a certified IRS letter?

If you miss the deadline, contact a tax professional. You may still be able to avoid serious IRS action. For example, if the IRS has already initiated wage garnishment, a tax attorney can help you negotiate a monthly payment arrangement to stop it.

How can I tell if my IRS notice is certified mail?

Certified mail typically says it is certified at the top of the envelope and requires your signature upon delivery.

Sources:
https://www.irs.gov/individuals/understanding-your-cp504-notice
https://www.irs.gov/pub/notices/cp504_english.pdf
https://www.irs.gov/individuals/understanding-your-cp3219a-notice
https://www.irs.gov/individuals/understanding-your-cp90-notice
https://www.irs.gov/individuals/understanding-your-cp523-notice
https://www.irs.gov/individuals/understanding-your-cp2000-series-notice
https://www.irs.gov/irm/part4/irm_04-010-002r