Got an IRS Letter in Hollywood, FL? Here’s What to Do in the Next 30 Days

Last updated: January 2026

Immediate Steps After Receiving an IRS Letter

When you receive an IRS letter, read it completely and note the response deadline. Compare the information with your tax return, gather relevant documents, and respond by the deadline shown. Most IRS notices require action within 30 days, and a prompt response prevents escalation of penalties, interest charges, and potential collection activities.

Why the IRS Sends Letters to Taxpayers?

The IRS sends correspondence for straightforward administrative reasons. Their automated matching systems continuously compare tax returns against third-party reports from employers, banks, investment firms, and payment processors. According to the IRS official guidance, when these systems detect discrepancies, they generate notices automatically.

Common reasons for IRS letters:

• Income reporting delays between financial institutions and IRS processing
• Missing forms or unreported transactions
• Simple data entry errors on your return
• Routine verification of deductions or credits

Understanding that most IRS letters address routine verification issues, not criminal investigations, helps reduce the stress many taxpayers feel when they open their mailbox.

Common Types of IRS Correspondence

Balance Due Notices

These letters inform you that the IRS believes you owe money from a previous tax return. The amount shown includes the original tax plus accumulated interest and any applicable penalties.

Common causes:

• Underpayment of estimated taxes
• Mathematical errors on returns
• Disallowed deductions discovered during routine review

Income Discrepancy Notices

When reported income on your return doesn’t match what employers, banks, or other payers reported to the IRS, you’ll receive an income mismatch notice. The IRS assumes their third-party information is correct and proposes adjusting your return accordingly. However, third-party reports can contain errors, duplicate entries, or may reflect gross amounts without accounting for legitimate deductions or basis calculations you properly included on your return.

Audit-Related Correspondence

Not every IRS examination requires an in-person meeting. Correspondence audits handle specific issues through mail exchanges. These letters typically request documentation for particular deductions, credits, or income items. Response deadlines are firm, and the quality of your documentation directly affects the outcome.

Collection Warnings

When prior notices go unanswered or payment arrangements aren’t made, collection letters escalate the situation. These warnings indicate the IRS may take enforcement action including filing tax liens, issuing levies against bank accounts or wages, or offsetting future refunds.

Quick Reference Guide to IRS Letters

Letter Purpose	What It Usually Means	Review your records and respond with payment or an explanation
Balance issue	IRS believes money is owed from a past return	Immediate action is required to avoid liens or levies
Income mismatch	Reported income differs from third-party documents	Verify W-2s, 1099s, and other income documents
Audit notice	Return selected for examination of specific items	Prepare supporting proof for questioned deductions or income
Collection warning	Account is past due and enforcement may begin	Immediate action required to avoid liens or levies

Your Response Checklist

1. Open and read the entire letter immediately, including all attachments and fine print.
2. Locate the response deadline prominently displayed on the notice, typically in the upper right corner.
3. Pull out your tax return for the year in question and compare it line by line with the IRS version.
4. Collect all supporting documents including W-2s, 1099s, receipts, bank statements, and prior correspondence.
5. Determine whether you agree or disagree with the IRS position based on your documentation.
6. Respond in writing by the deadline using the enclosed response form or following the instructions provided.
7. Keep copies of everything you send and use certified mail for proof of timely delivery.
8. Contact a tax professional if the situation involves complex issues or significant amounts.

Costly Mistakes When Handling IRS Letters

• Ignoring the letter: Unopened mail doesn’t stop IRS procedures. Penalties and interest compound daily, and the IRS interprets silence as agreement with their proposed changes.
• Missing deadlines: Response periods aren’t suggestions. After the deadline passes, your appeal rights narrow significantly and the IRS can assess the proposed amount without further notice.
• Responding without documentation: Explanations without supporting proof rarely change IRS determinations. Your burden is to substantiate your position with actual records.
• Paying without verification: Sometimes the IRS is simply wrong. Before sending payment, confirm their calculations and verify you actually owe the stated amount.

What Tax Professionals See Daily?

After reviewing thousands of IRS notices over decades of practice, certain patterns emerge:

• The IRS matching system excels at spotting missing income forms but struggles with context
• It sees gross proceeds from stock sales but not your cost basis
• It spots gambling winnings but not losses
• It catches 1099-K payment app receipts without understanding they represent reimbursements rather than taxable income

Many notices propose tax bills far exceeding what’s actually owed because the automated system lacks complete information. Taxpayers often panic unnecessarily when the solution requires simply providing documentation the IRS doesn’t have. The earlier you address correspondence, the more options remain available and the less interest accumulates.

IRS Issues Affecting South Florida Communities

Broward County’s diverse economy creates specific tax situations that commonly trigger IRS correspondence:

• Small business owners: Operating in the hospitality and service industries frequently receive notices about quarterly estimated tax underpayments
• Retirees: Managing multiple income sources sometimes face unexpected notices when required minimum distributions or investment sales aren’t properly reported
• Gig economy workers: More residents receive 1099 forms for ride-sharing, delivery services, or freelance work with different reporting requirements than traditional W-2 employment
• Real estate transactions: An active market generates 1099-S forms that can be misunderstood by automated systems

Understanding Response Deadlines and Notice Types

IRS notices specify exact response deadlines that carry legal significance. The Taxpayer Advocate Service confirms that most routine correspondence allows 30 days from the notice date to respond, not from when you received it.

Key deadline facts:

• CP2000 notices provide 30 days for response
• Statutory Notice of Deficiency provides 90 days to petition Tax Court
• Final notices of intent to levy allow 30 days before enforcement
• Taxpayers abroad typically receive 60 days to respond
• If deadline falls on a weekend or federal holiday, you have until the next business day

Mark deadlines on your calendar immediately. The IRS increasingly offers digital response options through their online portal for immediate confirmation. For assistance with sales tax audits or complex IRS situations, professional guidance ensures you meet all deadlines.

Most Common IRS Notice Types

CP2000 Income Underreporter Notice:

• Results from automated comparison of your return against third-party reports
• Includes detailed breakdown of discrepancies
• Review each item carefully, sometimes income was reported in a different section
• Third-party information can contain errors or duplicates

CP14 Balance Due Notice:

• Informs you of unpaid balance including original tax, penalties, and interest
• May result from filing without payment or IRS adjustments to your return
• Verify the balance is accurate before paying

CP504 Final Notice Before Levy:

• Warns of imminent levy on state refund or other property
• Arrives after multiple previous notices went unaddressed
• Contact IRS immediately, even if you cannot pay in full

When you understand IRS collection standards, you can better negotiate resolution terms if additional amounts are owed.

When Professional Help Makes a Difference?

Some IRS situations benefit significantly from professional representation:

• Multiple tax years with complex issues
• Business income involving inventory and cost of goods sold
• International transactions or FBAR requirements
• Situations where the IRS position seems clearly wrong, but proving it requires technical tax law knowledge

A CPA with tax resolution experience understands IRS procedures and knows which arguments the IRS finds persuasive. Having experienced representation prevents taxpayers from inadvertently volunteering information beyond what the IRS requested, which can expand the scope of examination.

Power of Attorney allows your representative to speak directly with the IRS on your behalf. You don’t need to take time off work for lengthy IRS phone calls or meetings while your representative handles technical discussions.

Payment Options for Tax Debt

The IRS understands that taxpayers face financial difficulties and has established programs to address various situations:

Short-term payment plans:

• Up to 180 days to pay balances under $100,000
• No formal installment agreement setup fee

Long-term installment agreements:

• Monthly payments over extended periods
• Typically up to 72 months for balances under $50,000

Currently Not Collectible status:

• Temporarily suspends collection activity during genuine financial hardship
• IRS reviews your income and necessary living expenses using standardized tables
• Debt doesn’t disappear and interest continues accruing

Offer in Compromise:

• Allows qualifying taxpayers to settle tax debt for less than full amount owed
• IRS examines your assets, income, and expenses
• Qualification requirements are strict

Understanding current IRS financial standards is essential when negotiating payment terms or hardship status.

Preventing Future IRS Correspondence

Wait for all tax documents before filing:

• Employers must mail W-2s by January 31
• Some investment firms don’t issue corrected 1099s until March
• Filing before all documents arrive increases the likelihood of discrepancy notices

Review tax forms immediately for accuracy:

• Employers and payers make mistakes
• Request corrected forms before filing your return
• File amended return proactively if discrepancies appear after filing

Keep detailed records:

• At least three years from filing date for standard audit period
• Longer retention for substantial underreporting or unfiled returns
• Digital copies provide backup if paper records are lost

For business owners and self-employed individuals, quarterly estimated tax payments prevent large balance due notices. Many tax resolution strategies focus on prevention.

Frequently Asked Questions

How long do you have to respond to an IRS letter?

Most IRS notices require response within 30 days from the notice date printed on the letter. Some specific notices provide 60 days, particularly for taxpayers residing abroad. The deadline appears prominently on the notice. Extensions may be available if requested before the original deadline expires.

Does receiving a letter mean you’re being audited?

No. Most IRS letters address routine matters like math corrections, missing documentation, or automated income matching. True audits represent a small percentage of total correspondence. The notice type and content indicate whether you’re under examination or simply receiving information or a request for clarification.

Can IRS letters be wrong?

Yes. The automated matching system generates many notices, and these systems lack full context. Third-party information can contain errors, duplicates, or incomplete data. Always verify the IRS position against your records before agreeing.

What happens if you don’t respond?

The IRS proceeds assuming you agree with their proposed changes. For balance due notices, collection activities escalate. For adjustment notices like CP2000, the IRS issues a Statutory Notice of Deficiency, formally assessing the proposed amounts. Your appeal rights diminish with each missed deadline.

Should I contact a tax professional?

Simple matters may not require professional help. However, significant amounts, multiple tax years, complex business issues, or situations where you believe the IRS is incorrect benefit from professional representation. Initial consultations often involve no cost or obligation.

Taking Control of Your Tax Situation

IRS letters create immediate stress, but they represent administrative processes with clear procedures and established taxpayer rights. Reading the notice carefully, understanding what’s being asked, and responding appropriately within the timeframe provided resolves most situations.

Documentation proving your position, combined with clear explanations, forms the foundation of effective responses. When complexity or amounts justify it, professional representation provides expertise and removes the burden of navigating IRS procedures yourself.

The key is taking action rather than hoping the matter resolves itself. Problems don’t improve with time, they compound with additional penalties and interest while your options narrow. Whether you handle the response yourself or work with a tax professional, addressing IRS correspondence promptly protects your financial interests and provides peace of mind.

If you’ve received an IRS letter and need guidance specific to your situation, professional tax resolution services can review your notice and help develop an appropriate response strategy. Understanding your situation and available options provides the clarity needed to move forward confidently.