Ignoring an IRS Notice Doesn’t Make It Go Away: What to Do Instead

That IRS letter sitting on your counter isn't going to disappear. But it also doesn't automatically mean you're in serious trouble.

IRS notices are sent for many different reasons. The IRS may be asking for information, notifying you about a change to your account, requesting payment, or addressing an issue with your tax return.

The important thing is to open it, understand what it's saying, and pay attention to the date.

First, Don't Panic

Seeing an IRS envelope can immediately make you think, “How bad is this?”

Take a breath.

Not every IRS notice means you owe money, and not every notice requires the same response. The notice itself should explain why the IRS contacted you and what you need to do.

Your first job isn't to fix everything.

It's to understand what the IRS is telling you.

Read the Notice Before You Decide What to Do

Look for a few key pieces of information:

• Why did the IRS send this?

• Which tax year does it involve?

• Does the IRS say you owe money?

• Is the IRS asking you for information?

• Does the notice give you a response deadline?

If you disagree with the notice, follow the instructions provided for disputing it. The IRS recommends responding by the date shown when a response is required.

And keep the notice with your tax records.

Don't Assume You Have to Pay Immediately

If the notice says you owe money, don't automatically assume you have to come up with the entire balance immediately.

First, make sure the information is accurate.

If you believe you've already paid, for example, gather your payment records and compare them with what the IRS says you owe. The IRS and Taxpayer Advocate Service recommend reviewing your records and responding if the balance is incorrect.

If you do owe the balance but can't afford to pay it all, there may be payment options available depending on your circumstances.

The key is to address the problem rather than avoid it.

What Happens If You Ignore the Notice?

Ignoring an IRS notice doesn't make the underlying issue go away.

Depending on the type of notice and your situation, failing to respond can lead to additional interest and penalties, loss of certain appeal rights, or further collection activity.

That doesn't mean every notice will turn into a levy or another serious collection action.

It means you shouldn't guess.

Read the notice. Understand what it's asking. Then decide what needs to happen next.

What If You Don't Understand the Notice?

You're not expected to automatically understand IRS language.

If the notice is confusing, you can start by gathering the notice, your related tax return, and any supporting records you have.

Then determine what question you're actually trying to answer.

Is the IRS saying you owe money?

Is the IRS asking for documentation?

Do you disagree with what they reported?

Are you being warned about potential collection activity?

Once you know the problem you're dealing with, the next step becomes much clearer.

Start With a Clear Picture

If you have an IRS notice sitting unopened—or you've opened it but still aren't sure what it means—don't keep putting it off.

Start by getting organized.

I've created an IRS Tax Debt Self-Assessment Checklist to help you gather the key information about your tax situation and identify what needs your attention.

Download the IRS Tax Debt Self-Assessment Checklist

[DOWNLOAD THE IRS TAX DEBT SELF-ASSESSMENT CHECKLIST]

You don't have to solve your entire IRS problem today.

But you do need to know what you're dealing with.

Open the letter. Read the notice. Know your next step.