The Tax Notice Timeline
As a small business owner, your mailbox is probably full of bills, bank statements, and junk mail. But nothing grabs your attention or spikes your blood pressure like an envelope stamped with three unmistakable letters: I-R-S.
Your first instinct may be to panic or ignore it. You’re busy, overwhelmed, or unsure of what the notice means. But here’s the truth: IRS letters don’t disappear, and silence only worsens things. Fortunately, with a little guidance (and some professional help, when needed), you can handle most notices calmly and effectively.
Let’s take a look at what these letters mean, why they matter, and how to respond appropriately.
Open It, Read It, Understand It
One of the easiest ways to get into trouble with the IRS is by ignoring or skimming a notice. Every letter has a deadline and specific instructions; missing either could cost you.
As you read the notice, look for:
- What the issue is (e.g., unpaid tax, underreported income)
- Which tax year does it involve
- What action is required (payment, response, or more information)
- How much time do you have to respond
Cross-Check the IRS with Your Own Records
Before jumping to conclusions or reaching for your checkbook, verify the facts. Compare what the IRS says with your tax return, financial records, and supporting documentation. It’s possible they’re right and you forgot a 1099, made a math error, or misreported income. But it’s also likely they’re wrong.
For example, third-party payers sometimes file duplicate or incorrect information.
Or a payment you made might not have been credited yet. If something feels off, it’s worth digging in. Accuracy matters because agreeing with the IRS by mistake could leave you paying more than you owe.
Act Before the Clock Runs Out
Every IRS notice comes with a deadline; missing it can cost you valuable options. Responding promptly keeps you in control and preserves your right to challenge mistakes.
Important timeframes to watch:
- Most notices give 21–30 days to respond before the IRS progresses with assessments or collections.
- Missing a deadline may lead to a Statutory Notice of Deficiency, leaving you just 90 days to take legal action or accept the IRS’s decision.
To Pay or Not to Pay
If, after reviewing everything, you agree with the IRS’s position, the next step is to pay either in full or through a payment plan. The notice will explain how to send payment or apply for an installment agreement.
Can’t afford to pay all at once? Don’t panic. The IRS offers structured payment plans to resolve your debt over time. Interest will still accrue, but you’ll avoid more serious consequences like bank levies or asset seizures. And setting up a payment plan shows the IRS you’re trying to resolve the issue, which can prevent them from taking further enforcement action.
But if you disagree with the notice? You have every right to say so. Make sure your response is clear, complete, and backed by evidence. Explain your position in writing, attach relevant documents, and keep a copy of everything. Responding effectively could save thousands and prevent the IRS from automatically assessing a higher tax bill.
Common Traps to Avoid
Dealing with a tax notice is stressful, but certain missteps can make it much harder to resolve. Avoid these common traps, which can turn a small issue into a major problem.
Watch out for:
- Ignoring the notice: The IRS won’t forget, and inaction leads to penalties, interest, or even liens.
- Relying only on phone calls: Verbal explanations don’t stop enforcement. You need a written response to protect your rights.
- Guessing your way through it: If you’re unsure what the notice means or how to reply, get expert help before the deadline passes.
This Is Where We Come In
Todd S. Unger can relieve this stress. We specialize in helping small business owners respond to notices, resolve tax disputes, and negotiate with the IRS when things get complicated.
Whether you’re facing a first-time CP14, a CP2000 with underreported income, or a stack of letters you’ve been avoiding for months, we can help you make sense of it and fix it.
From correcting errors to setting up payment plans or filing appeals, our team understands how the IRS works and how to protect your business’s interests every step of the way.
Don’t Wait for the IRS to Take the Next Step
The sooner you act, the more options you have. Letting a notice sit unopened or unanswered only shrinks your response window and increases the chance of enforcement. And trust us, you don’t want to be on the receiving end of a tax lien or levy just because you didn’t reply to a letter.
If you received an IRS notice yesterday or three weeks ago, contact us. Our team will explain what it means, what your rights are, and how to resolve it quickly and effectively.
