Two Systems, One Agency
The IRS communicates through two main types of correspondence: notices (CP series) and letters (LTR series). They look similar. They both arrive in those distinctive IRS envelopes. But they come from different systems within the IRS and carry different implications for your case.
CP Notices: The Automated System
CP notices are generated by IRS computers. When you file a return and the math does not match, a CP12 or CP16 goes out automatically. When your return shows a balance due, a CP14 fires off without any human involvement. When you do not file a return at all, the system generates CP59, CP515, CP516, and CP518 in sequence.
Because these notices are automated, they tend to follow predictable patterns. A CP14 is always followed by CP501, then CP503, then CP504, each one escalating the urgency. Understanding this sequence gives you a sense of where you stand in the collection process.
The advantage of automated notices is that they are well-documented. The IRS publishes guidance on most CP notices, and tax professionals see them constantly. The disadvantage is that the automated system does not always get it right. It matches information returns against your filing and generates notices based on discrepancies, even when those discrepancies have legitimate explanations.
LTR Letters: Human-Initiated
Letters in the LTR series are typically generated by an IRS employee or a specific IRS function. When an auditor wants to schedule an examination, they send Letter 692 or Letter 725. When a revenue officer is about to levy your assets, they send Letter 1058. When Appeals is scheduling a conference, Letter 380 goes out.
These letters often require more nuanced responses because a human being is on the other end making decisions about your case. Your response to a Letter 566 (information document request in an audit) can directly affect the outcome of the examination. How you respond to Letter 525 (30-day letter) determines whether you go to Appeals or straight to a statutory notice of deficiency.
Why the Distinction Matters
When you receive a CP notice, you are generally dealing with a systemic process. You can often resolve the issue by calling the IRS, submitting documentation, or setting up a payment arrangement. When you receive an LTR letter, you are more likely dealing with an active case being worked by a specific person or unit. The stakes are usually higher and the response needs to be more strategic.
Know whether you are dealing with a machine or a person. It changes everything about how you should respond.