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Every IRS letter carries a code in the corner. It tells you exactly where you are in the process — and, more usefully, how much time you have.
Find the notice number, usually printed in the upper-right corner. The sequence below runs roughly from first contact to imminent enforcement. Wherever you are in it, the letter is more useful opened than not: response deadlines are what determine which options stay available.
The first notice of an unpaid balance, sent after a return is processed and tax is assessed. It's routine and it is not an enforcement action — but it starts the clock, and interest and penalties are already accruing.
What to do: Confirm the amount is right before paying. If it isn't affordable, this is the easiest and cheapest point in the whole process to arrange terms.
Follow-up reminders that the balance remains unpaid. Still routine, but the account is now moving through the automated collection sequence rather than sitting still.
What to do: Don't wait for the tone to escalate. Options are widest here and narrow at every subsequent stage.
The IRS has heard nothing back. The sequence is now heading toward enforcement notices, and the interval between letters shortens from here.
What to do: Respond now. An arrangement made at this stage generally prevents the levy notices that follow.
A formal warning that the IRS intends to levy — commonly a state tax refund first, with authority to proceed against other assets after further notice. This is the point where most people first feel real alarm, and the alarm is warranted.
What to do: Act on this one. There is still room to arrange terms, but the window is closing and the next notices carry hard deadlines.
The final notice before enforced collection, and the one that carries your right to a Collection Due Process hearing. That right has a strict deadline printed on the letter, typically 30 days.
What to do: Do not let this deadline pass. Requesting a hearing in time generally suspends levy action and preserves appeal rights that are difficult to recover once lost.
Notice that a portion of Social Security benefits may be levied. For people on fixed incomes this is immediately serious.
What to do: Hardship status is frequently the right answer here and can stop the levy. Time matters.
Not an audit, but a proposal of additional tax where what you reported doesn't match what employers, banks, or brokers reported. It is often partly wrong — missing cost basis on stock sales is a classic cause of a wildly inflated proposed balance.
What to do: Never just pay it without checking. Respond by the deadline, agreeing with what's correct and disputing what isn't, with documentation.
Audit results and, in the case of a statutory notice of deficiency, the letter that starts a hard clock for petitioning the Tax Court.
What to do: The deficiency deadline is not extendable. If you disagree with the findings, this is the moment to get representation involved.
A 668W means a levy is active against your wages and your employer has been instructed to withhold. A 668D confirms a release.
What to do: If you're holding a 668W, this is an emergency — a release usually requires giving the IRS a resolution to point at.
One rule that applies to all of them
The worst response to any IRS notice is no response. Unanswered letters default to the IRS's position, forfeit appeal rights that had deadlines, and move the account toward enforcement automatically. Even a letter you can't act on financially is one you can respond to — and responding is almost always what keeps options open.
Send us the notice number. We'll tell you what it means, how urgent it is, and what your options are — free.
