Tax Controversy
Got a Letter from the IRS or SCDOR? Here's What to Do Next
Find your notice number below, see what it means and which date matters, then let a licensed CPA deal with the IRS or SCDOR on your behalf.
A CP3219A or other Notice of Deficiency gives you 90 days (150 if it is addressed to you outside the United States) to petition the U.S. Tax Court, and that deadline cannot be extended.
Find the notice or letter number in the corner of the first page, because that code, not the tone, tells you what you are dealing with. Most notices are proposals or bills with a reply date printed on them. A few have short legal deadlines that cannot be extended, so read the date before anything else, check whether the IRS or SCDOR is actually right, and answer only what was asked.
How we handle it
Free consultation and a read of the letter
Bring or send the notice and we read it with you, in person on James Island or by video. We identify what it is, which date controls, and whether anything has to happen this week.
Authorization and transcripts
You sign a Form 2848 so we can speak to the IRS for you, and a power of attorney for SCDOR if the letter is from the state. We pull your IRS account transcripts so we can see the whole account, not just the one letter.
Check whether they are right
We compare the notice against your return and the documents behind the item in question. Proposed changes are sometimes partly or wholly wrong, for example when a 1099 was reported without cost basis or credited to the wrong taxpayer.
Respond by the deadline
We send the response, agreement, protest or appeal request with the supporting documents, and keep proof of what was sent and when. If more time is needed and the notice allows it, we ask before the date passes.
Resolve any balance and close it out
If tax is owed, we work through the options: paying in full, a Simple Payment Plan or other installment agreement, an offer in compromise, Currently Not Collectible status, and penalty relief where the facts support it. We follow the account until the transcript shows the matter closed.
What to have ready
- Every page of the letter, plus the envelope
- Any earlier notices about the same tax year or balance
- The tax return for the year the letter is about
- The documents behind the item in question (W-2s, 1099s, brokerage statements with cost basis, receipts)
- Proof of any payments already made
- Your IRS Online Account login, if you have one
- Your MyDORWAY login, if the letter is from SCDOR
- Contact details for whoever prepared that return
Please don’t send tax documents or Social Security numbers through the website form. Bring them to the consultation. More in documents to bring to your CPA.
Common IRS notices and the date that matters
| Notice | What it means | The date that matters |
|---|---|---|
| CP2000 / CP2501 | Income or payment information the IRS received from employers, banks or brokers does not match your return. It proposes a change. It is not a bill and not an audit. | Reply by the date on the notice. With no reply, the IRS may send another notice and a bill. |
| CP14 | A bill: the IRS says you owe unpaid tax. | Pay by the date on the notice to avoid further interest. After that, interest and the late-payment penalty keep running. |
| CP501 / CP503 | Reminders that a balance is still unpaid. CP503 is the second reminder. | The date on the notice. If ignored, the IRS may file a Notice of Federal Tax Lien. |
| CP504 | Notice of Intent to Levy under IRC section 6331(d). The IRS can now take any state tax refund you are due. | Pay or make arrangements immediately. Other levies and a lien can follow. |
| LT11 / Letter 1058 | Final notice of intent to levy, with your right to a Collection Due Process hearing. | 30 days to request a hearing with the Independent Office of Appeals (Form 12153). This is the hearing window that protects your appeal rights. |
| Letter 566 | Your return has been selected for a correspondence examination (an audit by mail). It lists the items being questioned. | The due date in the letter. If no documents arrive, the questioned items are disallowed. |
| Letter 525 | A 30-day letter at the end of a mail audit, with Form 4549 showing the proposed changes. | Generally 30 days from the letter date to agree or request an Appeals conference in writing. |
| CP3219A | Statutory Notice of Deficiency based on third-party information. The last step before the IRS can assess the tax. | 90 days (150 if addressed outside the U.S.) to petition the U.S. Tax Court. No extension. |
| Letter 5071C | A return was filed with your name and SSN or ITIN, and the IRS must verify your identity before processing it. | Verify online or by phone. The phone option asks you to call within 30 days of the letter date. |
Before you respond: make sure it is real
The IRS generally makes first contact by mail. It does not initiate contact by email to ask for personal or financial information, does not text or message you on social media about your taxes, and payment always goes to the United States Treasury. If you are unsure about a letter, do not use the phone number printed in it; look up the number on irs.gov or bring the letter to us. For SCDOR, you can check a notice through MyDORWAY, or call 1-844-898-8542, the general number SCDOR publishes for notice questions. Our article on what to do after an IRS audit letter covers this in more depth.
Letters from the South Carolina Department of Revenue
SCDOR notices work differently from IRS notices, and the state deadlines are their own.
Start in MyDORWAY
For many of its most common notices, SCDOR offers a Notice Help Tool inside MyDORWAY that explains why the notice was sent. Someone else can discuss your notice with SCDOR only once a valid power of attorney is on file.
A Proposed Assessment has a 90-day protest window
If you disagree with a Proposed Assessment, you have 90 days from the date of the notice to file a written protest, online through MyDORWAY, on Form C-245, or in a letter. SCDOR says it will not attempt to collect while a timely protest is resolved. Miss the window and SCDOR makes its final assessment and begins collection.
What we can and cannot promise
We can tell you what the letter means, whether the IRS or SCDOR has it right, and what your options are, and we can handle the correspondence and calls for you. We cannot promise that a penalty will be removed, an appeal will succeed or an offer will be accepted. Those decisions belong to the agency, and we will tell you plainly when a position is weak.
Sources
- IRS — Understanding your CP2000 notice
- IRS — Understanding your CP504 notice
- IRS — Understanding your CP3219A notice
- IRS — Understanding your LT11 notice or Letter 1058
- 26 U.S.C. § 6213 (Cornell LII) — 90/150-day Tax Court petition period
- Taxpayer Advocate Service — Letter 525
- SCDOR — Letters and notices
- SCDOR — Appeals process
By Haigler CPA Group. Updated . The information on this site is general in nature and is not tax, legal, or accounting advice for your situation. Tax law changes and the right answer depends on facts we would need to review with you. Please speak with a qualified professional before acting on anything you read here.
This is for you if
- You have an IRS or SCDOR letter and are not sure what it means or how serious it is.
- The notice proposes tax you do not think you owe.
- You have a balance due and cannot pay it all at once.
- Your return has been selected for a mail audit and you want someone else to handle the correspondence.
- You would rather a CPA talk to the IRS than make the call yourself.
What sits outside this service
- Criminal tax matters. If IRS Criminal Investigation has contacted you, an attorney should lead and we work alongside them.
- Arguing your case in U.S. Tax Court, which requires separate admission. We prepare the position and coordinate with counsel.
- Legal advice of any kind.
Start somewhere else if you need
Questions people ask about this
Is a CP2000 notice an audit?
No. A CP2000 is an automated proposal based on a mismatch between your return and forms the IRS received from others. It is not a bill and not an examination, but it does need a reply by the date on the notice, and agreeing to a proposal that is wrong costs you money.
Can I get more time to respond to an IRS letter?
Often, yes, if you ask before the response date passes; the letter tells you whom to contact. Some deadlines are fixed by law and cannot be extended, including the 90-day period to petition the Tax Court on a Notice of Deficiency and the 30-day window to request a Collection Due Process hearing.
Will the IRS remove the penalties on my notice?
Sometimes. The IRS now applies an Automatic Exemption from Penalty to failure-to-file, failure-to-pay and failure-to-deposit penalties for taxpayers with three prior years of timely compliance, and First-Time Abate can still be requested for certain earlier returns. Otherwise relief depends on reasonable cause. No one can promise the result.
Can a CPA talk to the IRS for me?
Yes. Once you sign Form 2848, a CPA can represent you before the IRS, and the calls and letters go through us. SCDOR requires its own power of attorney on file before it will discuss your notice with a representative.
What should I do with a letter from the South Carolina Department of Revenue?
Read the notice type and date first. If it is a Proposed Assessment you disagree with, you have 90 days from the notice date to file a written protest, which can be done in MyDORWAY. For other notices, the contact details on the notice or the MyDORWAY Notice Help Tool are the starting point.
Keep reading
- Tax ControversyIRS audits, penalty abatement, appeals, and back-tax resolution.
- Unfiled tax returnsMissed one year or several? We find out what the IRS already has, prepare the missing federal and South Carolina returns, and sort out the balance after they are filed.
- IRS notice lookupEvery IRS notice carries a code. Find yours below to see what it generally means, which date matters, and what to do before that date passes.
- SCDOR noticesSouth Carolina runs its own notices, deadlines and appeal rights, separate from the IRS. Find the type of letter you received below.
- What to Do After an IRS Audit LetterMost IRS letters are not audits, and most are resolved by a correct, timely response. The mistakes that cost people money are ignoring the letter, missing the date on it, or answering more than was asked.
- Documents to BringA checklist for the first conversation, so the second one is about answers.
- Tax Deadline CalendarThe federal dates that matter, in order, with what each one actually requires.
- Tax FAQAnswers to the questions we are asked most.
Talk to a tax expert
Tell us what you are dealing with and we will tell you how we would handle it.