When You Receive a Letter from the IRS: Common Mistakes to Avoid and How to Decide What to Do First

At the beginning of the year, many people receive tax-related forms and notices. Among them, one of the most unsettling items to find in the mailbox is a letter from the IRS. Seeing “Internal Revenue Service” on the envelope alone can immediately raise concerns such as:

“Did I make a mistake?”
“Is this a penalty?”
“Is this an audit?”

However, not every IRS letter means something serious or negative. In many cases, the letter is simply requesting confirmation or clarification. In this article, I will summarize common mistakes that tend to happen after receiving an IRS letter, as well as a practical order of steps to review the situation calmly before taking action.

Common Mistakes People Make After Receiving an IRS Letter

From real-world situations I have seen, the problem often does not come from the contents of the letter itself, but rather from how the taxpayer reacts to it. Here are some situations that happen frequently.

Leaving the envelope unopened because it feels scary

This reaction is very understandable — but almost every IRS letter includes a response or action deadline.

If the notice is ignored, the situation may progress automatically, leading to:

• Additional interest or penalties
• The IRS treating the contents as agreed or accepted

The most important first step is to open the letter, read it carefully, and confirm what the deadline is.

Relying on online stories or social media examples and assuming the same applies

Two taxpayers may receive letters with the same notice number, but:

• Income situation
• State of residence
• Past filing history
• Foreign income or bank accounts

…can result in different causes and different appropriate responses.

Online experiences can be helpful references, but they do not always apply to your own situation. If something does not fully make sense, it is safer to pause before proceeding.

Agreeing with the IRS calculation or proposed change without reviewing it

The information in the letter is not always correct.

Situations where discrepancies may occur include:

• Certain income or deductions were not reflected
• Foreign income or currency conversions were treated differently
• Third-party reporting data did not match the taxpayer’s records

Before paying or agreeing, it is important to verify the facts, figures, and supporting documents.

What to Review First: A Practical Order of Steps

Once the letter is opened, it helps to review it in the following order:

1. Notice or letter number (CP, LT, C-letter, etc.)
2. Type of communication (adjustment, verification, payment request, identity check, etc.)
3. Response or action deadline
4. Whether the information matches your actual situation
5. Whether you can address it yourself or whether it requires careful review

Among these, the most critical points are:

• The deadline, and
• Whether the contents reflect accurate facts

When IRS Letters Tend to Be Issued (Practical Examples)

In practice, letters are commonly issued in situations such as:

• A mismatch between the filed tax return and IRS-reported data
• Large fund transfers or international transactions
• Refund amounts that are unusually high
• Additional identity verification requested
• Unpaid balances, late payments, or past-due amounts

In other words, many letters are issued for confirmation purposes, rather than because of wrongdoing.

How to Distinguish an IRS Letter from a Scam

In recent years, IRS-related scams have increased. Extra caution is needed when:

• Immediate payment is demanded over phone or email
• Payment instructions involve gift cards or unusual methods
• The sender information or wording appears unclear or inconsistent
• The letter directs you to a non-official website link

If you are unsure, it is advisable to verify the notice number using the official IRS website rather than responding immediately.

When You Should Not Handle the Situation Alone

Many IRS letters can be resolved by calmly reviewing the contents and responding appropriately. However, situations such as the following may require more careful judgment:

• The contents are complex or difficult to interpret
• There is uncertainty about the meaning of the English wording
• The information appears inconsistent with your records
• The notice is related to late payment, collections, or levy actions

In such cases, seeking clarification or guidance before taking action may help prevent the situation from becoming more complicated.

Summary

When receiving a letter from the IRS, the key points are:

• Do not panic, and
• Do not ignore the letter

By confirming the contents and the deadline, and deciding calmly how to proceed, it is often possible to address the situation appropriately.

About ZEIFUKU-kun & Optional Related Short Video (Japanese)

This topic is also introduced in a short video in our Japanese-language learning series.
The series features ZEIFUKU-kun, a friendly “knowledge owl” character designed to help explain tax concepts in a clear and approachable way.

(Please note: The video is currently available in Japanese only.)

🎥 IRS Letters — Check Before You React