How to Respond to an IRS Business Notice

Step-by-step process to handle IRS business notices efficiently and avoid escalation penalties.

  1. Read the notice completely and identify the issue type. Check the notice code (CP-XXX or Letter XXXX LTR) and match it to the IRS notice database online. Most business notices fall into four categories: math errors, missing forms, payment issues, or audit requests. Note the response deadline — typically 30 days from the notice date.
  2. Gather supporting documentation immediately. Pull your filed returns, payment records, and bank statements for the tax periods mentioned. If the notice claims missing payments, compile proof of payment including check images, ACH confirmations, or EFTPS transaction records. For missing forms, gather the referenced schedules or information returns.
  3. Pay undisputed amounts within 10 days. If you owe money and agree with the calculation, pay immediately via EFTPS or check to stop interest and penalty accrual. Interest compounds daily at the federal short-term rate plus 3 percentage points (roughly 6-8% annually as of 2026). Even partial payments reduce the interest calculation base.
  4. Draft your written response with specific documentation. Write a formal response letter referencing the notice number and your EIN. Include copies (never originals) of supporting documents. For disagreements, cite specific tax code sections or regulations. Send via certified mail with return receipt to create a paper trail.
  5. Submit response before the deadline and track delivery. Mail your response at least 5 business days before the deadline to account for processing delays. The IRS considers your response timely if postmarked by the due date. Keep the certified mail receipt and tracking information in your tax files.
  6. Monitor for follow-up correspondence and escalate if needed. The IRS typically responds within 6-8 weeks. If you receive a second notice or disagree with their response, contact the Taxpayer Advocate Service for disputes over $50,000 or engage a tax attorney for audit defense. Document all phone calls with case numbers and representative names.