An IRS Notice Is an Opening Position. Not a Verdict.

Here's the direct answer: read the notice code in the top corner, find the response deadline, and get the letter in front of a CPA before you pay anything or call anyone. Most IRS notices are generated by computer matching programs, not by a human who reviewed your return — and the proposed amounts are frequently wrong, usually in the IRS's favor.

The classic example: a brokerage reports $120,000 of stock sale proceeds to the IRS. The matching computer doesn't know what you paid for the shares, so it treats the entire $120,000 as gain and proposes tax on all of it. Your actual profit might be a fraction of that — but the notice doesn't ask, it asserts. Your job is to answer with evidence, on time.

What we do first is simple: you upload the notice through our secure portal, we compare it line-by-line against your return and IRS transcripts, and we tell you — usually within days — whether the IRS is right, wrong, or partially right, and exactly what the response should say.

IRS notices escalate in a sequence. Early letters propose or remind; later letters threaten enforcement. Knowing where your letter sits in that sequence tells you how much time you have and how forceful the response needs to be.

The two we see most are the CP2000 and the CP504, and they could not be more different. The CP2000 is a proposal — the underreporter unit thinks your return missed income, and it invites a response. The CP504 means earlier notices went unanswered and the IRS is preparing to take money. We've written full plain-English guides to both: see our CP2000 guide and our CP504 guide.

State notices follow the same pattern with less patience. State revenue agencies run their own matching programs, and several are quicker to garnish and levy than the IRS. We handle those too, in all 50 states.

Every notice carries a deadline, and the consequences of missing one are asymmetric: respond on time and you keep every option; miss it and options start disappearing permanently.

• Miss a CP2000 deadline and the IRS issues a Statutory Notice of Deficiency — escalating a correctable mismatch into a formal legal process.
• Miss the 90-day Tax Court window on a Notice of Deficiency and you generally lose the right to dispute the tax before paying it. To fight afterward, you typically must pay first and sue for a refund.
• Ignore collection notices past the CP504 stage and the IRS can move on state tax refunds and issue levy notices — at which point you're negotiating to undo something instead of preventing it.

Meanwhile, the meter runs. The failure-to-pay penalty accrues at 0.5% of the unpaid tax per month, up to 25%, and interest compounds daily on top at rates the IRS resets quarterly. A balance that sits for two years can grow by a third or more before anyone negotiates anything.

You're allowed to respond to a notice yourself, and for a trivially simple one that can be fine. But DIY responses fail in predictable ways: they explain instead of document, they answer questions the IRS didn't ask, they miss the penalty-relief request entirely, and they go out without anyone checking the IRS's own math. The reviewer on the other end isn't grading effort — they're matching your evidence against their records.

Composite example: a client receives a CP2000 proposing roughly $34,500 — about $28,800 of additional tax on $120,000 of "unreported" stock proceeds, plus a 20% accuracy-related penalty. The brokerage had reported gross proceeds without basis. Actual cost basis: $105,000, making the real long-term gain $15,000 and the correct additional tax about $2,250 at the 15% capital gains rate. The response — a corrected gain calculation with brokerage statements attached and a request to drop the penalty — resolved the matter for a small fraction of the proposed amount. Outcomes vary case by case and no result can be promised, but this pattern of inflated proposals is the rule in basis-related notices, not the exception.

There's also the phone problem. Calling the IRS yourself means long hold times on the general line and a conversation where everything you volunteer goes in the file. Under power of attorney, we use practitioner channels, and we say exactly what the case needs said — nothing else.

• 1. Power of attorney. You sign Form 2848 and we file it with the IRS. From that point, correspondence copies come to us and we handle IRS contact. You stop dreading the mailbox.
• 2. Investigation. We pull your IRS account and wage-and-income transcripts to see exactly what the IRS received, assessed, and applied — then reconcile that against your return. We find the discrepancy before we say a word to anyone.
• 3. Response. We draft a documented response — corrected calculations, source documents, and the relevant authority — packaged the way IRS reviewers process fastest, and filed before the deadline.
• 4. Cleanup and prevention. We evaluate penalty relief — First-Time Abatement for clean three-year histories, reasonable cause where the facts support it — set up payment arrangements if a real balance remains, and fix the root cause so the same notice doesn't arrive next year.

That last step is where being a planning firm matters. A notice is usually a symptom — under-withholding, a missing basis schedule, a sloppy prior-year return. Resolving the letter without fixing the cause just schedules the next one. If the balance is large or spans multiple years, our tax relief service handles the full resolution; if the underlying return needs to be done right going forward, that's our tax preparation practice.

• CPA-led, not a call center. Your notice is reviewed by credentialed professionals at a firm built by Bryan Martin, CPA, MBA — not routed through a "tax relief" lead-generation operation.
• We prepare complex returns all year. Notices are usually matching failures, and we work on the kinds of returns that generate them — equity compensation, K-1s, rentals, crypto — daily. We know where the computer goes wrong because we reconcile against it constantly.
• Genuine multi-state expertise. State notices from nonresident filings and multi-state income are core practice areas here — especially for locum tenens physicians and remote workers.
• Established and nationwide. Roughly 1,500 clients across all 50 states, fully remote, with a secure portal for uploading notices and documents in minutes.
• A planning firm underneath. Once the notice is resolved, the same team can make sure your withholding, estimates, and filings stop producing them.