What Does a Certified Letter From the IRS Mean? (2022)

Last Updated: August 17, 2022 8 min read
Author: Zach L.

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The IRS sends certified mail as a way to show that an attempt was made to give you notice of an issue that the IRS wants to address, and they expect a response.

What Does a Certified Letter From the IRS Mean? (2022)

Even the most composed persons might get agitated when they receive an IRS-certified letter. Checking the mail is seldom a fun activity. You may wonder about the reasoning behind the IRS letter and begin mentally going through your recent transfers to identify potential problems. Some might immediately go online to see whether they've received a letter from the IRS informing them of an assessment.

However, the IRS issues certified letters for a myriad of purposes. The document may request identification confirmation before the IRS issues a refund check, and it might even be an auditing notice. Consider these typical justifications for obtaining IRS-certified mail.

IRS letters are documents that certify the authenticity of a signature, document, or other correspondence. Letters can be used for various purposes, including tax purposes, to verify a person's identity, or to certify the authorization of an agent. The IRS provides this service for free.

  • An IRS letter is not a substitute for an original document and should not be used as such. It does not bear any legal weight and is not valid in court.
  • IRS letters certify that the IRS has approved a particular transaction and that it is now considered to be a valid transaction.
  • IRS letters are not required for every transaction, but they are often necessary for transactions with a high dollar amount or when there is a need to provide proof of approval from the IRS.

What Are the Different Types of IRS Letters?

What Are the Different Types of IRS Letters?

There are five main types of IRS letters that taxpayers can receive. Not all of them are bad news, but you should open all mail the postal service delivers to you from the IRS. They are important letters and should be treated as such.

Notice of Deficiency

This is a letter from the IRS to inform you that they have determined your tax return is incomplete and that you owe additional tax. Suppose the Internal Revenue Service (IRS) has sent you a Notice of Deficiency for an outstanding balance on your taxes. This notice means that you owe money to the IRS and must take action to pay your debt. The outstanding balance is the amount of money you owe after subtracting any payments you have made to the United States federal government.

If you do not pay your outstanding balance, the IRS may take legal action to collect the money that you owe. This could include garnishing your wages or seizing your property. The IRS could also file a lawsuit against you in tax court.

It is vital to take action to pay your outstanding balance as soon as possible to avoid any legal action from the IRS. You might be able to strike a payment plan with the IRS. You can also try to appeal the Notice of Deficiency.

You should contact a tax professional even if you do not have any questions about your Notice of Deficiency or your outstanding balance. They can provide insight into the situation and what your alternatives are. This might not result in an additional fee, it just depends on your tax preparer.

Notice of Intent to Levy and Notice of Your Right to A Hearing (Lien)

This is a letter from the IRS stating they intend to levy your wages or bank account or place a lien on your property, and you have the right to request an in-person hearing with an IRS revenue officer or IRS agent. The Notice of Intent to Levy and Notice of Your Right to A Hearing (Lien) is a document issued by the Internal Revenue Service (IRS) when a taxpayer has unpaid taxes. These notices are sent to your last known address, and there can be severe penalties for ignoring them.

This notice is the initial step in the IRS' collection process, and it informs the taxpayer that the IRS intends to levy their assets, such as their bank account, to satisfy the unpaid tax debt. The notice also provides the taxpayer with information on their right to a hearing to contest the levy, which is normally a legal requirement. The IRS also sends out a final notice of intent before they start the process for a federal tax lien. The next steps include a 21-day freeze of your assets, and eventually a levy of your assets.

Letter of Offer in Compromise

This is a letter from the IRS stating they will accept less than full payment for some or all of what you owe if you can show hardship. The Offer in Compromise (OIC) benefits the taxpayer because it is an opportunity to resolve a singular tax issue and create a payment plan for the debt. Important notes are that the tax bill is most likely going to be less, but this doesn't mean that you can become delinquent on other tax bills that you may have outstanding from the IRS. This isn't a resolution of every IRS problem that you may have unless the letter explicitly states it. The bottom line is an OIC is a great opportunity, but might not always be available and is not a silver bullet.

IRS Notice of Determination

The IRS notice of determination is an automatic letter that explains the outcome of a taxpayer's audit. If the taxpayer has been assessed for any changes, the letter will detail what specific changes have been applied to the tax return and what notations were made to the tax account. Receiving this letter can be crucial for taxpayers to understand how much they owe or are owed from their previous year's taxes.

Refund Inconsistency or Mismatch

So, if you're expecting an income tax return refund from the IRS for the tax year and there's a mismatch, you may receive a refund discrepancy letter. It means you have received an incorrect amount and the letter is to inform you of the additional information. This could either be in your favor or in the favor of the government and you have a balance due to pay back the extra you were paid.

Why Do You Receive IRS-certified Letters?

Why Do You Receive IRS-certified Letters?

The IRS will send you a certified letter if they need to contact you about an issue that requires your attention.

This could be a notice of an unpaid tax balance, a notice of change in status, or an inquiry about your tax return. The IRS sends these letters to ensure that they can get in touch with you and that you have the opportunity to respond before they take any further action against you.

If you have moved, filed your taxes incorrectly, have unpaid balances, haven't paid the full amount, or have an outstanding tax liability you could receive a notice from the IRS. The letter will contain information about the specific issue and ask for a response by a set date. It usually entails additional detail, that can be really beneficial to determine the importance of the letter. These are some of the different reasons for an IRS-certified letter.

When Should You Be Worried About an IRS Letter?

The IRS has various letters that they send out to taxpayers, some of which are more problematic than others. If you receive a notice from the IRS, it is essential to know what the letter is about and if you should be worried or not. The more severe the letter, the more you should be concerned. If you receive a notice of an impending tax lien or an IRS audit letter that is much worse than getting a letter that your federal tax return was a little short and they will be sending you more money.

Taxpayer Advocate Service Assistance

Taxpayer Advocate Service Assistance

Taxpayer Advocate Service Assistance is a government agency with the mission to "advocate on behalf of taxpayers and collect their thoughts and suggestions." In order to make sure everyone's voice can be heard; this organization has set up a website where people can submit their feedback. They are there to help you if you can't resolve your problem with the IRS and the problem is causing financial difficulties for your family or business. The TAS can also help if the IRS is not responding to you so make sure to use them as a resource.

Final Thoughts

There are many reasons you may receive a certified letter from the IRS at the post office or at your home, and not all of them are bad news. You could have had a mismatch on your tax refund, and be owed even more from the government. The good news is that if you have any questions the IRS has many ways to contact them, and their contact information can be found on the IRS site. Most methods of contact have business hours of 7 AM - 7 PM Monday thru Friday.

This article is not legal advice or tax advice, make sure to consult with a qualified tax attorney or other tax professionals.