What to Do When You Receive an IRS Notice of Non-Compliance

If you've recently received an IRS letter of non-compliance, try not to immediately panic. While non-compliance letters can sound serious, there are tried and true methods to help you bring your account back to good standing. The most important thing to do after receiving an IRS letter of non-compliance is to understand the reason for non-compliance. The content in your IRS notice will clearly state why you received the letter and how to proceed. 

The IRS will send letters of non-compliance for many reasons. For instance, if you failed to make a tax payment for a given period or missed the deadline to renew your Tax Registration Certificate, you may receive a non-compliance letter. It's not uncommon to receive multiple IRS letters, which may leave you feeling disorganized. You can speak to an IRS representative to assist you or use automated software to organize your IRS tax notices


In this article, you'll learn about: 

  • The reasons you've received a notice of non-compliance 
  • How to resolve notices of non-compliance 
  • How automation software can help you stay organized 


>>> Download Our Free Notice-Tracking Spreadsheet Template!


Reasons for Receiving a Notice of Non-Compliance 

There are multiple reasons the IRS will send you a notice of non-compliance. Federal, state, or local governments will all send out non-compliance notices. The two most common reasons they send them are: 

  • You previously registered for a Tax Registration Certificate but have not yet filed for your annual renewal 
  • You have failed to make the payment for a given tax period 


If you've already filed and paid for your annual Tax Renewal, you should send another copy of your tax return to ensure they received it properly. We also recommend you speak with your CPA or an IRS representative to ensure your account is in good standing. If you believe you received the notice of non-compliance in error, confirm with an IRS representative to dispute the notice. 


Resolving Non-compliance Notices  

Carefully read your non-compliance notice to understand the reason it was sent. The IRS notice will clearly state how to proceed and your options. If the notice states, you can register online to renew your Tax Registration Certificate. The IRS e-filing system speeds up the process of filing your renewal. You may also be eligible to make payments online.  


You must ask for assistance from an IRS representative if you have questions. We recommend erring on the side of caution to avoid any additional fines or issues.  


If you're juggling multiple IRS non-compliance notices and find that you can't stay on top of them, there is a light at the end of the tunnel. The IRS writes off a notable amount of tax dues each year through tax relief programs. Businesses can apply to enter into payment plans, which can offer a significant amount of financial relief for those who don't have the funds to pay the entire amount in a lump sum. 


Use Automation Software to Stay on Top of Notices  

Business owners often get pulled in multiple directions throughout the day. It's easy to lose track of IRS tax notices amid all the chaos. Fortunately, there are automation software systems to help business owners keep track of notices. The software helps users file taxes, make payments, and renew certificates on time, helping to prevent non-compliance issues before they even occur.  

While it's understandable to be hesitant to spend money on new software, the amount you'd pay for a non-compliance penalty will cost more. Automation software systems will pay for themselves by preventing even one fine or penalty due to non-compliance. Not to mention, outsourcing the organization of your IRS tax notices will free up your time to concentrate on running your business efficiently. 


How You Benefit from NoticeNinja 

NOTICENINJA is a digital compliance company that has been at the forefront of the industry for over a decade. We're trusted by many of the world's largest corporations and service providers to help prevent costly IRS penalties by tracking changes and updates in notices, amended returns, and other tax-related tasks. If you'd like to learn more about NOTICENINJA and how we can help you and your company, we'd love to chat! Reach out today for additional information and a free consultation. 

Download the Free Guide to Manual and Automated Tax Notice Handling