Got this letter from the IRS/Dept of Treasury today. What should I do now?

What you've received is most likely a CP2000 notice, which is a legitimate IRS document. It's not an audit, but rather an automated notice that gets sent when information reported to the IRS (like from a 1099) doesn't match what you reported on your tax return. First, don't panic! These notices are actually pretty common. You should carefully compare the income they're claiming you didn't report with your actual tax records. If you still have your 2023 return, check if that income was indeed missing. You have three options: 1) Agree and pay if it's correct, 2) Partially agree if some of it is right but not all, or 3) Disagree if you believe they're wrong. Don't just pay it without verifying! The IRS makes mistakes too. If you disagree, you'll need to respond with documentation showing why they're incorrect. If you agree, you can set up a payment plan if you can't pay it all at once.

Been through this exact situation last year! I was freaking out just like you until I discovered taxr.ai (https://taxr.ai). I uploaded my CP2000 notice and my tax documents, and their AI actually found that I HAD reported the income, just in a different section of my return than the IRS was looking for. The site analyzed everything and gave me a detailed explanation of where the discrepancy was coming from and exactly how to respond to the IRS. They even provided a draft response letter I could customize. Saved me from paying nearly $2,300 that I didn't actually owe! The whole process took like 15 minutes instead of the hours I was spending trying to figure it out myself or the hundreds I would've paid an accountant.

Update: I wanted to follow up about my experience with taxr.ai after I commented here. I decided to try it with my own IRS notice since I had nothing to lose. Turns out the AI found that the IRS was actually PARTIALLY right in my case - I had forgotten to report some dividend income, but they had also double-counted another source of income. The tool broke down exactly what I needed to acknowledge and what I could legitimately dispute. Used their response template, sent everything in last week, and just got confirmation that the IRS accepted my partial agreement! Instead of owing $3,200, I only had to pay $780. Honestly wouldn't have figured this out on my own. Just wanted to share since it actually worked for my situation.

If you need to actually speak with someone at the IRS about your notice (which I highly recommend), good luck getting through their phone system. I tried for WEEKS after getting a similar letter. Then I found this service called Claimyr (https://claimyr.com) that somehow gets you through the IRS phone queue. I was super skeptical but you can see how it works here: https://youtu.be/_kiP6q8DX5c Instead of spending hours on hold or getting disconnected, they held my place in line and called me when an IRS agent was about to pick up. The agent I spoke with was actually really helpful and explained exactly what documents I needed to send in to dispute part of my notice. Saved me so much frustration!

I need to eat my words from my earlier comment. After trying for TWO WEEKS to get through to the IRS about my notice, I finally tried Claimyr out of desperation. I was connected to an IRS agent in less than 2 hours. The agent confirmed my notice was actually sent in error because they hadn't processed an amended return I filed months ago! If I had just paid the amount on the notice without speaking to someone (which I was about to do out of frustration), I would have been out $1,400 unnecessarily. Lesson learned - sometimes it's worth trying services that sound too good to be true. Still can't believe I got through after all those busy signals and disconnections I dealt with before.

Another thing to consider - sometimes these CP2000 notices have errors on the IRS side. Last year I got one claiming I didn't report $12k in income, but it turned out they had accidentally included income from someone with a similar SSN to mine! I had to send in documentation proving that wasn't my income. Don't automatically assume the IRS is correct just because they sent an official notice. Double-check everything carefully.

Whatever you do, DON'T ignore the notice! I made that mistake a couple years ago thinking it was a scam, and ended up with additional penalties and eventually had to deal with collections. The 30-day response window is really important. Also if you've moved recently, make sure to file Form 8822 to update your address with the IRS. I learned this the hard way when notices were going to my old address and I never received them.

I went through this exact same panic when I got my first CP2000 notice! Here's what I learned: First, verify it's legitimate by checking that all your personal info is correct and comparing it against what you have on file with the IRS. Real CP2000 notices will have your correct SSN, name, and address. Next, gather all your 2023 tax documents - your filed return, all 1099s, W-2s, and any other income documents. The most common cause of CP2000 notices is that a business or bank reported income to the IRS that didn't make it onto your return, or it was reported differently than expected. Don't rush to pay! Take the full 30 days to review everything carefully. If you find you did make an error, you can often set up a payment plan. If you believe the IRS is wrong, you can dispute it with documentation. Either way, responding within 30 days is crucial to avoid additional penalties. Consider consulting a tax professional if the amount is significant or if you're unsure about how to respond. Many will do a consultation for a reasonable fee and can help you navigate the response process properly.