How IRS Notices Are Sequenced

Understanding IRS notice sequences

The IRS follows a procedural sequence when communicating with taxpayers about assessments, collections, and enforcement actions. Understanding this sequence helps you determine what stage your account is at and what action the IRS is taking. Each notice type serves a specific purpose and signals what may come next.

IRS notices are not random—they follow established patterns. If you're in an audit, you'll receive specific audit notices. If you have unpaid taxes, you'll follow the demand and levy sequence. If you've failed to file, you'll receive notices requiring you to file. Knowing where you are in the sequence tells you what stage the IRS is at and what your options are.

Common IRS notice types

The IRS sends notices with specific designations. Common prefixes include CP (Computer Paragraph), which indicates the notice was computer-generated, and Letter designations for more detailed correspondence. Each notice number indicates what the IRS is communicating about.

Notice of Deficiency (CP-3219)

A Notice of Deficiency, also called a "90-day letter," is formal notice that the IRS intends to assess additional tax. This is the critical notice—if you disagree with the IRS's position, you have 90 days (or 150 days if you're outside the U.S.) to file a petition in Tax Court to contest the assessment.

If you don't contest the Notice of Deficiency in Tax Court within the 90-day period, the IRS will assess the tax and begin collection procedures. This is a final opportunity to dispute the proposed changes before they become law. After 90 days pass with no Tax Court filing, you've effectively agreed to the assessment.

Demand for Payment (CP-14)

A Demand for Payment (CP-14 or similar notice) is the first collection notice. It states that taxes are owed and demands payment within a specific number of days (usually 10-30 days). This notice indicates the IRS has assessed taxes and is beginning collection activity.

Receiving a Demand for Payment is not yet a legal enforcement action, but it is a warning. If you don't respond or pay, the IRS will escalate collection activities. This is the stage where you can request an installment agreement or other collection alternative if you cannot pay in full.

Final Notice of Intent to Levy (CP-2750 or Letter 1058)

A Final Notice of Intent to Levy is sent before the IRS seizes your wages, bank account, or other assets. This notice is required by law and serves as the final warning. It states that unless you pay the debt or respond within 30 days, the IRS will levy (seize) your property.

Upon receiving a Final Notice of Intent to Levy, you have limited time to request a collection alternative (payment plan, offer in compromise, or currently not collectable status). After the 30-day period, the IRS can levy without further notice.

Audit notices

If you're selected for an audit, you'll receive an examination notice specifying which years are under review, which items the IRS wants to examine, and what documentation they want. These notices come from IRS local offices or the IRS Criminal Investigation Division and usually provide a timeline for responding.

Audit notices differ by type: Office audits require you to come to an IRS office, Correspondence audits are handled by mail, and Field audits involve an IRS agent visiting your business. Responding to audit notices with complete documentation is essential. Failure to respond can result in a default assessment.

The procedural timeline

The typical IRS enforcement timeline follows this sequence:

1. Initial notice: The IRS identifies an issue (unfiled return, underreported income, unpaid tax) and sends an initial notice requesting action or information.
2. Demand for Payment (if applicable): If the issue is unpaid taxes, the IRS issues a Demand for Payment, usually with 10-30 days to respond.
3. Notice of Deficiency (if disputed): If you dispute a proposed assessment, the IRS issues a Notice of Deficiency giving you 90 days to file in Tax Court.
4. Assessment: If you don't dispute or request a payment plan, the IRS assesses the tax as final.
5. Final Notice of Intent to Levy: If the debt remains unpaid, the IRS issues a Final Notice of Intent to Levy, giving you 30 days to request a collection alternative or pay.
6. Levy: If no response or payment, the IRS levies your wages, bank account, or other assets.

This sequence is not universal—it varies based on whether the issue is an unpaid tax, an audit, a failure to file, or a criminal investigation. But understanding this basic flow helps you determine what stage your case is at.

What each notice requires

Different notices require different responses:

• Failure to File Notice: Requires you to file the missing return or provide proof that no return was required.
• Demand for Payment: Requires payment within the specified timeframe, or a written request for payment options.
• Notice of Deficiency: Requires either payment or a written protest within 90 days if you disagree. Silence = acceptance.
• Audit Notice: Requires you to provide the documentation requested by the deadline specified in the notice.
• Final Notice of Intent to Levy: Requires a written response requesting collection alternatives within 30 days, or full payment.

Ignoring IRS notices is never an option. Each notice has legal deadlines—missing them results in the IRS taking the action threatened in the notice. If you receive an IRS notice you don't understand, a tax professional can explain it and help you respond appropriately.