The IRS collects federal income taxes and enforces the tax code

The Internal Revenue Service (IRS) is the federal agency that collects income taxes from individuals and businesses, and enforces the rules about who owes what. It is part of the U.S. Department of the Treasury. When you file a tax return, you are sending information to the IRS. When the IRS sends you a letter about your taxes, it is because something in your return caught their attention, or because you owe money, or because they are telling you that you are owed a refund.

The IRS does not decide tax policy — Congress does. The IRS interprets the tax code that Congress writes and applies it to millions of returns every year. If you disagree with an IRS decision about your taxes, there are formal ways to challenge it, and those routes are separate from the IRS itself.

Key Takeaways

  • The IRS is a federal agency that collects income taxes and enforces tax law; it does not set tax policy.
  • The IRS processes tax returns, sends refunds, and investigates returns that do not match their records or that claim deductions they question.
  • If the IRS contacts you, it is usually because of a mismatch between your return and what employers or banks reported about you, or because you owe back taxes.
  • You can dispute an IRS decision through formal appeals processes, and you have the right to representation during that process.
  • The IRS has a Taxpayer Bill of Rights that outlines what you can expect from the agency and what protections you have.

How the IRS gets information about your income

Employers, banks, investment firms, and other organizations send the IRS copies of documents that report your income. Your employer sends a W-2 form. Your bank sends a 1099-INT if you earned interest. A brokerage sends a 1099-B if you sold stocks. When you file your tax return, the IRS compares what you reported to what these third parties reported. If the numbers do not match, the IRS will contact you.

This matching happens automatically through computer systems. You do not have to do anything to trigger it — it is part of how the IRS processes every return. If there is a discrepancy, you will receive a letter explaining what does not match and what you owe or what you need to provide as proof.

Why the IRS sends you letters

The IRS sends letters for several common reasons. You may have reported income that does not match what your employer or bank reported. You may have claimed a deduction that the IRS questions. You may owe back taxes from a previous year. You may have underpaid your estimated taxes. You may have made a math error on your return. Or the IRS may be telling you that you are owed a refund.

Not every letter means you are in trouble. Many letters are routine corrections or requests for documentation. Some letters are notices that your refund has been delayed because the IRS is reviewing your return. Others are bills for taxes you owe. The letter itself will explain what the IRS found and what you need to do next.

What happens if you disagree with the IRS

If the IRS sends you a bill or denies a deduction you claimed, you have the right to challenge that decision. The process is called an appeal, and it happens through the IRS Office of Appeals, which is separate from the office that made the original decision. You can also request a conference with an IRS representative before the appeal stage.

You do not have to represent yourself. You can hire a tax professional, a certified public accountant (CPA), an enrolled agent, or a tax attorney to handle the dispute for you. If you cannot afford representation and the dispute involves a significant amount of money, you may be able to get help from a Low Income Taxpayer Clinic, which are free legal clinics funded by the IRS but run independently.

The IRS will send you a letter explaining your appeal rights. That letter will include a deadline for requesting an appeal, usually 30 days from the date of the letter. If you miss that deadline, you can still dispute the decision in tax court, but the process is different and more formal.

The Taxpayer Bill of Rights

The IRS publishes a Taxpayer Bill of Rights that outlines ten specific protections you have when dealing with the agency. These include the right to be informed about why the IRS is contacting you, the right to representation, the right to appeal an IRS decision, and the right to a fair and just tax system. The IRS is required to explain these rights to you when it contacts you about a dispute.

If you believe the IRS has violated your rights — for example, by continuing to contact you after you have asked them to stop, or by not giving you time to respond to a notice — you can file a complaint with the IRS Office of Inspector General. You can also contact the Taxpayer Advocate Service, which is an independent office within the IRS that helps taxpayers who are having trouble resolving disputes with the agency.

How to contact the IRS

The IRS has a main phone line, but wait times are often very long, especially during tax season. The phone number is on any letter the IRS sends you. You can also visit the IRS website at irs.gov to find contact information for your local IRS office, to download forms and publications, or to check the status of your refund.

If you are responding to an IRS letter, follow the instructions in that letter. Most letters include a specific address where you should send your response, or a phone number to call. Do not ignore an IRS letter, even if you disagree with it — responding within the deadline protects your rights and keeps the matter from escalating.

Frequently Asked Questions

What is the difference between the IRS and the Treasury Department?

The IRS is a bureau of the Treasury Department. The Treasury Department oversees all federal finances, including borrowing, spending, and currency. The IRS is the part of Treasury that collects income taxes and enforces tax law.

Can the IRS take my tax refund if I owe money?

Yes. If you owe back taxes, child support, or certain other federal or state debts, the IRS can intercept your refund and apply it to what you owe. You will receive a notice explaining this before it happens, and you have the right to request a hearing to dispute the debt.

What should I do if I receive an IRS letter I do not understand?

Read the letter carefully and follow the instructions it provides. If you still do not understand, call the number on the letter or visit irs.gov. You can also hire a tax professional to explain it to you. Do not ignore the letter or miss any deadlines it sets.

Does the IRS ever contact people by email or text?

No. The IRS initiates contact by mail only. If you receive an email or text claiming to be from the IRS, it is a scam. Do not click links or provide information. You can report it to the IRS at phishing@irs.gov.