What to Do If You Receive an IRS Notice 609
An IRS Notice 609 flags a discrepancy in your reported income. Learn to interpret the notice and navigate the required response procedures.
The Internal Revenue Service sends millions of letters to taxpayers annually for various reasons, from information requests to notifications of account changes. These communications are the agency’s primary method for addressing issues that arise during tax return processing.
Purpose of IRS Notice 609
IRS Notice 609 is a Privacy Act Notice that accompanies other IRS correspondence, such as a CP2000 notice. The primary notice is sent when there is a mismatch between the income on your tax return and information provided to the IRS by third parties like employers or financial institutions. These payers file information returns, such as Form W-2 and various 1099s, which an automated system compares to your return.
When a discrepancy is found, the IRS proposes changes to your tax, interest, and penalties. The notice details the specific unreported income, identifying the payer and the amount, and calculates the proposed additional tax. This can include a 20% accuracy-related penalty for a substantial understatement of tax, plus interest. The IRS’s authority to request this information is found in Internal Revenue Code 6001 and 6011.
Responding if You Agree with the Changes
If you agree with the proposed changes, the correspondence will include a response form to consent to the assessment. You must sign and date this form, acknowledging your agreement with the additional tax liability, and return it to the IRS by the deadline specified in the notice.
Prompt payment prevents further interest and penalties from accumulating. You can include a check or money order payable to the “U.S. Treasury” with your response form. You can also pay electronically through the IRS Direct Pay system or set up an online payment agreement if you cannot pay the full amount at once.
Responding if You Disagree with the Changes
If you disagree with the information in the notice, do not sign the consent form. Instead, you must prepare a written statement explaining why the proposed changes are incorrect. Your explanation should directly address the discrepancies identified by the IRS.
You must attach supporting documentation to your statement that substantiates your position, such as corrected information returns, bank statements, or records showing the correct basis of a sold asset. Mail your signed statement, copies of your supporting documents, and a copy of the original IRS notice to the provided address before the deadline.