Why Did I Receive a Certified Letter from the IRS?

When it comes to getting unexpected letters in the mail, having to sign for one is usually not a signal that the letter contains good news. This is particularly true when getting a letter from the IRS. If you receive a certified letter from the IRS, it’s safe to assume that it’s important. 

However, don’t panic just yet, as the IRS is required to send letters and notices via certified mail in certain situations, even if the recipient isn’t in trouble and doesn’t owe a large tax debt. To help you better understand why you received a letter from the IRS via USPS Certified Mail, this post explains what Certified Mail is and what to do if you receive a letter from the IRS. 

An Overview of USPS Certified Mail 

Certified Mail is the official name for a service that customers of the U.S. Postal Service (USPS) can add to First-Class or Priority Mail. With Certified Mail, the sender will receive:

• Proof of mailing (in the form of a mailing receipt).
• Tracking of the mailed item.
• Electronic verification that the item was delivered (a signature is required for delivery) or that a delivery attempt was made.

As you might imagine, requesting Certified Mail service costs extra. Because the IRS sends out a lot of letters, the IRS doesn’t use Certified Mail unless it has a specific reason to do so. 

Reasons the IRS Uses Certified Mail 

The USPS is very reliable, but it’s not perfect. Certified Mail provides the IRS with a way of confirming a letter they mail was received or at the very least, a delivery attempt was made. The IRS also uses Certified Mail when it sends something where the date of mailing matters.

For example, if the IRS sends you a Final Notice of Intent to Levy (sometimes known as LT11 or LT1058), the 30-day clock before the IRS places a levy on your property begins on the day the IRS mails this letter. By sending this notice via Certified Mail, the IRS has a mailing receipt that serves as proof of when the 30-day clock should begin.

Another reason the IRS might send you a certified letter is because they previously sent you other notices about unpaid taxes (such as CP14, CP501, CP503, or CP504), but received no response from you. Trying to collect an outstanding balance when prior collection notices have gone unanswered (that were sent via standard First-Class mail) might be one of the biggest reasons for the IRS to send letters by Certified Mail. 

The IRS might send you a certified letter for other reasons, such as informing you about the:

• Termination of an installment agreement – This will usually come in the form of Notice CP523).
• Start of an audit – Keep in mind, however, that many audit notices get mailed through regular U.S. mail).
• The need to confirm your identity – If the IRS suspects identity theft, they may send you a certified letter to confirm you really filed the return, before sending you a tax refund.
• Imposition of one or more penalties – In particular, the agency sends certified mail about penalties like the Trust Fund Recovery Penalty Assessment (Letter 1153). 

IRS Certified Mail FAQs 

Does getting a certified letter from the IRS mean I’m in trouble? 

Not necessarily, but a certified letter from the IRS often signals bad news. When the IRS mails you something by Certified Mail, it always means there’s an important tax matter that concerns you. That being said, this type of letter often means you’re in trouble with the IRS with any number of potential issues, such as back taxes, wage garnishment, losing your passport, or a tax lien.

In some cases, the certified letter doesn’t mean you’re in trouble, but that the IRS needs additional information from you or wants to give you a heads-up about something specific. This might arise in situations such as:

• Tax return errors – There’s a discrepancy on your tax return that affects your tax refund.
• Information requests – The IRS wants you to provide information or testimony about yourself or someone else 
• Summons – Sometimes if the IRS wants info, they may send you a summons, which often comes via Certified Mail.
• Tax refund offset– The IRS anticipates that a tax refund you might be expecting will instead be applied to an outstanding tax balance.
• Tax return changes – The IRS believes it needs to make changes to your tax return (this may come in the form of Notice CP2000 if the information you put on the return contradicts information the IRS received from third parties).

What should I do if I get a certified letter from the IRS? 

What you do depends on why the letter was sent. But regardless of the IRS’ reason(s) for sending it, whatever you do, don’t ignore it. Not responding won’t make whatever issue the letter relates to go away and it will likely make things worse.

The first thing you should do is carefully read the letter. Don’t just read the first page or skim it, but read the whole thing. There’s important information in this letter and that’s why the IRS paid extra to make sure you got it. The letter should explain what the issue is, but if it doesn’t, there should be IRS contact information located in the letter where you can learn more about what’s going on.

If the letter concerns the IRS taking action against you, such as levying your property, there should also be instructions on your next steps, including how to challenge the IRS’ determinations. These instructions will often contain important deadlines that if missed, could make it far more difficult (if not impossible) to contest the IRS, resolve your tax situation, or prevent it from getting worse.

Lastly, consider talking to a tax professional with experience handling these particular tax issues. This is especially true if you don’t fully understand the letter, aren’t sure what you should do in response to it, or the letter is the result of ignoring prior tax collection notices from the IRS and the IRS is now escalating their collection activities.

If you have defenses to the tax liability or ways to settle your tax debt to avoid further tax collection actions, your tax professional can help you respond to the letter. For instance, if the IRS sent you a certified letter notifying you about an imminent tax levy, it’s possible you can appeal the levy.

What should I do if I receive a USPS notice in my mailbox telling me I have to pick up the certified letter from the post office, but the post office is closed? 

You’ll most likely need to stop by the post office when it’s open to pick up the letter and sign for it. You’ll typically have 15 days from the initial delivery attempt before the USPS returns the certified letter back to the IRS. There’s a chance the USPS will try to deliver the certified letter to your home or place of business again for signature, but that’s unlikely. 

Can I ignore the certified letter? 

If you do, it’ll only make your tax problems worse. If you ignore the certified letter, it’ll eventually get sent back to the IRS. You might think this is a good thing in that it might stall whatever plan the IRS has that involves you. This isn’t necessarily true.

For example, before the IRS levies your property, they’re only required to deliver the levy notice to your last known address. If you’ve moved and haven’t set up mail forwarding or informed the IRS of your move, you’ll never receive this notice. However, this won’t necessarily stop the IRS from placing a levy on your property.

Don’t forget that if you already have an outstanding tax balance with the IRS, ignoring the IRS’ attempts to collect the tax debt will not make it go away. Instead, any penalties and interest will continue to accrue, which you’ll have to pay. If you don’t, it could eventually lead to a tax lien or levy (discussed above). 

Should I contact a tax professional about this certified letter? 

If you read the letter and know how to respond to it, then you probably don’t need to talk to a tax professional about it. That being said, it usually doesn’t hurt to contact a tax pro and explain your situation to them. They can then confirm if your planned response is your best solution.

In contrast, if you don’t understand the letter or how you should respond to it, then contacting a tax resolution professional, such as a tax attorney, is recommended. A tax lawyer can help you negotiate a tax settlement with the IRS, as well as file any appeals or challenges to the IRS’ collection actions, such as a lien or levy. If the certified letter concerns a request for information (including an audit), a tax attorney or other tax professional can help you respond to the IRS with the necessary information. 

Still Concerned About a Certified Letter from the IRS? 

It’s understandable that you might be worried if you received Certified Mail from the IRS. But before you get too worked up about it, understand that it might not be a major problem. And if it is, there are tax professionals, such as those found at the W Tax Group, that can help. 

We understand that sometimes the worst part of dealing with the IRS is not knowing or understanding what’s going on. Contact us to set up a free consultation. We’ll be more than happy to explain why you received a certified letter from the IRS, what it means for your taxes, and what you can do to obtain the best potential outcome.

Lead Tax Attorney at The W Tax Group

Stephen A Weisberg