If you’ve received an IRS letter recently, you’re not alone — and it may not mean what you think it does.
Our office has seen a significant increase in IRS notices during the 2025 filing season, and we’re hearing the same from tax professionals across the country. Many of our clients are receiving letters even when their payments were made correctly and on time.
What Kind of Notices Are Going Out?
The notices we’re seeing most often involve:
- Missing or unapplied estimated tax payments
- Payments credited to the wrong tax year or spouse
- Incorrect balances due
- Large penalties and interest charges
- Delayed refund processing
- Requests to verify banking information
- Underpayment penalty notices
In many cases, the IRS system simply hasn’t caught up with payments that were already made.
Why Is This Happening?
A few things are contributing to the surge in IRS correspondence right now.
The IRS is in the middle of a major system modernization, transitioning payment and refund processing to electronic and direct deposit methods. That transition has created gaps — automated notices are going out before payment records are fully updated.
On top of that, the IRS has ramped up its automated notice programs after scaling back during the pandemic. Many of these letters are computer-generated before any human review takes place. Add in elevated interest rates, and even a temporary payment mismatch can produce a notice with a surprisingly large balance.
We’re also seeing an uptick in notices requesting direct deposit verification as the IRS phases out paper refund checks. Millions of taxpayers have received CP53E and related notices this season — many of them unnecessarily alarming.
Received a Notice? Here’s What to Do.
Don’t panic — and don’t automatically pay it.
Before you do anything, we recommend:
- Read the notice carefully and note the tax year it references
- Gather your proof of payment
- Verify that the payment was applied to the correct year and account
- Call the IRS directly to review your account transcript
IRS Contact Numbers:
- Individual Accounts: 800-829-1040
- Business Accounts: 800-829-4933
When you call, have the notice, a copy of your filed return, proof of payment, and your Social Security number or EIN on hand.
The Bottom Line
An IRS notice is not the same as an IRS determination. We are actively working through situations right now where payments were made on time, notices were issued prematurely, and IRS systems had simply not updated before penalties were assessed.
If you receive a notice and aren’t sure what to do, reach out to us before taking action. We’re here to help you sort through it.
Contact Accavallo & Company: (203) 925-9600 | [email protected] | www.aco.cpa
