A lot of filers face a sense of dread after they receive a IRS notice or letter in the mail advising them that they need to provide more information related to their tax return, take some action or potentially face further examination or audit by the IRS.
A primary concern is how long this notice of letter will delay their refund and how long will ongoing IRS processing and communications take. I’ll discuss this in the article via the sections below.
IRS Notice Timing
Normally the IRS takes up to 30 days to perform additional reviews on returns before sending a formal notice (e.g CP05) to the tax filer.
However during the peak of tax season (Feb to April) with ongoing IRS processing delays, they have advised that in some cases where special or manual handling is required, it could take 90 to 120 days.
This includes many returns with incorrectly claimed refundable credit amounts that the IRS cannot resolve internally, or returns with significant missing information, or there is suspected identity theft or fraud.
Tax filer Response timelines to IRS notices
Generally the IRS expects you to respond within 30 days, of receiving official notices. However at times the IRS notice or letter will require a response by a specific date.
If you don’t respond by the required deadline you could face interest charges and penalties; or worse you could lose your right to appeal any findings you disagree with.
What happens after I respond to the IRS
After you respond to the IRS, it could take up to 60 more days for the IRS to respond and close the case.
However, this timeline is much shorter if you respond in a timely manner with accurate information that allows the IRS to complete processing on your tax return.
If you don’t agree with the changes requested, you can file an appeal or meet with an IRS examiner, but you have 90 days to reach a resolution or you could get a Notice of Deficiency in the mail.
When will I get my Refund Payment?
After the adjusted return has been signed and returned to the IRS, your refund or tax bill should be sent to you within 6-8 weeks of the latest notice date. If money is owed, payment plans with the IRS are possible or you can pay in a lump sum amount.
When can I contact the IRS around their notice or letter
While most correspondence can be handled without calling or visiting an IRS office, if you have questions, call the telephone number that’s usually found in the upper right-hand corner of your notice.
Make sure you have a copy of your tax return and the correspondence available when you call so we can readily access your account. However, expect to be on hold for a considerable time given IRS staffing shortages.
If you need to contact the IRS with questions around your notice at the provided contact details (normally on the top right-hand corner of the letter) you will need to allow at least 30 days for their response.