IRS Letter 4046: What Is It and How Should You Respond?

Last updated 11/11/2024 by

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Summary:

IRS Letter 4046 is sent to taxpayers as an acknowledgment that the IRS has received an appeal or dispute regarding their account. This letter confirms the appeal is under review and advises the taxpayer on what to expect next. Understanding the purpose of Letter 4046, how to respond, and what documents are needed can help taxpayers effectively manage their appeals and ensure a smoother review process. In this article, we’ll explore the significance of Letter 4046, steps to take if you receive it, and how to prepare for a successful resolution.

Receiving IRS Letter 4046 can cause anxiety, especially when it involves a dispute or appeal with the IRS. This letter acts as an official acknowledgment from the IRS that they’ve received your appeal and are reviewing your case. Knowing how to respond and what steps to take is essential to avoid delays or potential penalties. In this article, we’ll walk you through the purpose of Letter 4046, what it means for you, and provide a comprehensive guide on how to navigate the appeals process to achieve a favorable outcome.

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What is IRS Letter 4046?

IRS Letter 4046 is an official document sent by the Internal Revenue Service to acknowledge receipt of a taxpayer’s appeal. When a taxpayer disagrees with an IRS decision, they have the right to file an appeal. Letter 4046 notifies the taxpayer that their appeal has been received and outlines the next steps in the process. Typically, the letter confirms that the appeal is now under review, along with information on expected timelines and any required documentation.

Why you might receive IRS Letter 4046

There are several reasons you might receive IRS Letter 4046:

Dispute over a tax assessment: If you disagree with the amount assessed by the IRS, filing an appeal could prompt a Letter 4046.
Collection action dispute: Taxpayers can appeal IRS collection actions, including liens or levies, which may result in receiving this letter.
Request for penalty abatement: If you requested penalty relief and the IRS agrees to review it, Letter 4046 serves as acknowledgment.
Appeal for an audit finding: When a taxpayer disagrees with an IRS audit outcome, they may file an appeal, which leads to receiving this letter.

Receiving Letter 4046 indicates that the IRS is evaluating your appeal and will contact you with further information.

Pro Tip

Set up IRS account alerts online to get real-time notifications on any changes to your tax return or account. This helps you stay updated on adjustments and due dates.

How IRS Letter 4046 affects you

Letter 4046 is an essential document that provides taxpayers with confirmation of their appeal request. While receiving this letter does not immediately change any IRS actions, it indicates that your case is under review and that collection or enforcement actions may pause temporarily until the review is complete. Here’s how it may impact you:

Temporary relief from collection actions

In many cases, once the IRS acknowledges an appeal, any immediate collection actions, such as wage garnishments or liens, are placed on hold. This allows you to work through the appeal process without the pressure of enforced collections, although interest and penalties might still accrue.

Potential for delayed resolution

While Letter 4046 means the IRS is considering your appeal, the process can take time. Appeals typically require detailed review, and additional information may be requested, which could delay the final decision. Understanding these potential delays can help you plan your finances accordingly.

Pro Tip

Keep copies of all correspondence, including Letter 4046 and related documents, in a dedicated folder. This organization can simplify responding quickly to any IRS follow-up requests.

Steps to take when you receive IRS Letter 4046

Upon receiving Letter 4046, it’s important to stay proactive. Follow these steps to ensure you’re well-prepared for the appeals process:

Read the letter thoroughly: Understand what the IRS is requesting, including any additional documentation or information needed.
Gather supporting documents: Collect any evidence or records that support your appeal, such as receipts, financial statements, or prior tax returns.
Review deadlines: Pay attention to deadlines in the letter. Meeting these deadlines is crucial to keep your appeal active and progressing.
Contact an IRS representative if needed: For complex cases, reach out to the IRS Appeals Office or consult a tax professional to clarify the process.

How to respond to IRS Letter 4046

Responding promptly to Letter 4046 can help expedite your appeal and reduce the risk of further complications. Here’s how to approach your response:

Steps to complete your response

1. Review the appeal requirements: Identify what the IRS needs from you. This could include additional documentation, explanations, or clarification on specific items.
2. Prepare a written response: If the letter requests a response, provide a clear, concise explanation of your case, highlighting any errors or misunderstandings in the original IRS assessment.
3. Include all relevant documentation: Ensure that every document supporting your appeal is organized and attached, with copies of critical evidence that strengthens your case.
4. Submit your response within the stated deadline: Timely responses show cooperation and ensure your appeal remains active.

Pro Tip

Consider working with a tax professional if you’re unsure about the appeal process. A professional can help you avoid errors, understand complex IRS requests, and make the strongest case for your appeal.

Additional ways to manage IRS Letter 4046

Beyond the immediate response, there are other steps you can take to strengthen your appeal:

Consider professional help: A tax professional, like a CPA or tax attorney, can provide expertise and represent you before the IRS.
Explore the IRS Taxpayer Advocate Service (TAS): If your case is experiencing unusual delays or you’re facing financial hardship, the TAS may provide assistance.
Request an installment agreement: If your appeal involves unpaid taxes and the amount is undisputed, consider requesting a payment plan while the appeal is underway.

Working with professionals and using IRS support options can simplify the process and reduce the stress of handling an appeal alone.

Consequences of not responding to IRS Letter 4046

Ignoring Letter 4046 can lead to serious consequences, including:

Continuing enforcement actions, such as liens, levies, or wage garnishments.
Loss of appeal rights if deadlines pass without a response.
Additional penalties and interest on any unpaid balances.

Promptly addressing the letter and following the necessary steps is essential to protecting your financial well-being and ensuring fair review of your case.

Possible outcomes of the IRS appeal process

Once your appeal is reviewed, several outcomes are possible:

Full acceptance: The IRS may agree with your appeal and make the requested adjustments to your account.
Partial acceptance: In some cases, the IRS might agree to part of your appeal but uphold other portions of the assessment.
Rejection: If the IRS rejects the appeal, they will provide an explanation and may offer other resolution options.

Regardless of the outcome, the IRS will communicate their decision and outline any next steps. Knowing what to expect can help you prepare for all possible scenarios.

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Frequently asked questions

What should I do if the IRS requests additional documentation after receiving Letter 4046?

If the IRS requests additional documentation after sending Letter 4046, it’s essential to respond promptly. Gather the required documents, organize them clearly, and send them by the deadline indicated in the request. This will ensure your appeal continues without unnecessary delays.

Can I appeal the IRS’s decision if they deny my appeal after sending Letter 4046?

Yes, if the IRS denies your appeal, you may have additional options, such as requesting a conference with the Appeals Office or escalating your case to the Tax Court. A tax professional can provide guidance on the best course of action based on your situation.

How long does the IRS typically take to review an appeal after sending Letter 4046?

The IRS review process can vary, with most cases taking anywhere from a few weeks to several months. Factors like the complexity of your case and the volume of other appeals the IRS is handling can impact the timeline. Letter 4046 may include an estimated timeframe, but it’s best to be prepared for potential delays.

What are my options if I am facing financial hardship during the appeal process?

If you’re experiencing financial hardship, the IRS Taxpayer Advocate Service (TAS) may be able to help. The TAS assists taxpayers facing financial or procedural difficulties in resolving tax issues. Contacting the TAS can help you manage the appeal process without significant financial strain.

Will receiving Letter 4046 stop all IRS collection actions?

Receiving Letter 4046 may temporarily halt some collection actions, such as levies or garnishments, while your appeal is under review. However, interest and penalties may continue to accrue on any unpaid taxes. It’s essential to confirm with the IRS if specific collection actions are paused in your case.

Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.

IRS Letter or Notice Number

Notice Description

CP01	The IRS verified your claim of identity theft and will monitor your account.
CP01H	The IRS received a tax return with a social security number that belongs to a dead person.
CP02H	Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma.
CP03C	You received the First-Time Homebuyer Credit for a house you purchased.
CP04	You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice.
CP08	You may be entitled to additional money due to the Additional Child Tax Credit.
CP10	Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed.
CP10A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP11	You owe money because the IRS amended your return due to a miscalculation.
CP11A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed.
CP11M	Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP12	You are due a bigger refund because the IRS corrected one or more mistakes on your tax return.
CP12A	The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return.
CP12E or CP12F	The IRS corrected a miscalculation on your return.
CP12M	The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return.
CP12R	The IRS made changes to the computation of the Rebate Recovery Credit on your return.
CP13	The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero.
CP13A	The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero.
CP13M	The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero.
CP13R	The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero.
CP14	You owe money on unpaid taxes.
CP16	The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts.
CP21A	You owe money due to the changes you requested that the IRS make on your tax returns.
CP21B	You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks.
CP21C	The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero.
CP21E	As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes.
CP21I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP22A	The IRS made the changes you requested, and you owe money as a result.
CP22E	As a result of your recent audit, the IRS changed your tax return, and you now owe money.
CP22I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP23	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes.
CP24	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP24E	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP25	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero.
CP31	You need to update your address because your refund check was returned to the IRS.
CP45	The IRS was unable to apply your overpayment to your estimated tax as you requested.
CP49	The IRS used all or part of your refund to pay a tax debt.
CP53	Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit.
CP57	The bank declined your payment, so the IRS was unable to draft funds from your bank account.
CP71	A reminder of the amount you owe in tax, penalty, and interest.
CP71A	A reminder of the amount you owe in tax, penalty, and interest.
CP71C	A reminder of the amount you owe in tax, penalty, and interest.
CP71D	A reminder of the amount you owe in tax, penalty, and interest.
CP88	The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax.
CP90	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing.
CP91	The IRS will levy up to 15% of your social security benefits for unpaid taxes.
CP120	The IRS needs documentation of your tax-exempt status.
CP120A	Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years.
CP130	You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed.
CP152	The IRS received your return.
CP153	The IRS will send your refund by mail because your direct deposit did not go through.
CP161	You have an unpaid balance due to the IRS.
CP166	Your monthly payment to the IRS did not go through due to insufficient funds in your bank account.
CP178	You may no longer owe excise tax because your tax return filing requirements changed.
CP231	You need to update your address because your refund was returned to the IRS.
CP259	You did not file the business tax return identified in the notice.
CP259A	You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard).
CP259B	The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259C	The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259D	You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return.
CP259E	You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP259F	The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return.
CP259G	The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
CP259H	As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP276A	You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time.
CP276B	The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time.
CP297	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP297A	The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP298	The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes.
CP501	You have a balance due on one of your tax accounts.
CP503	You have an unpaid balance on one of your accounts, and the IRS has not heard from you.
CP504	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe.
CP504B	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe.
CP521	A reminder that you have an installment agreement payment due.
CP523	You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets.
CP601	Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas.
CP603	No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas.
CP604	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda.
CP604B	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda.
CP621	Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente.
CP623	Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo.
CP711	Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones.
CP721	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP722	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP771	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP772	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP773	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP774	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP959	Usted no radicó su planilla de contribución de negocios identificada en este aviso.
CP2000	The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due.
CP3219A	The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax.
CP3219N	The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days.
Letter 0012C	The IRS needs additional information to process your tax return.
Letter 0484C	The IRS wants a completed
Letter 0525	Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed.
Letter 531	IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return.
Letter 0668D(LP 68)	The IRS released their levy.
Letter 0549C	Your tax bill was paid.
Letter 0681C	The IRS accepted your payment proposal. However, this is not a formal Installment Agreement.
Letter 0757C	You did not adhere to the terms of your Installment Agreement.
Letter LT 11	The IRS plans to seize your property or rights to property.
Letter 1058	The IRS has not received your payment. It plans to seize your property or rights to property.
Letter 1615 (LT 18)	You must respond to the IRS within 10 days of this notice regarding past due tax returns.
Letter 1737 (LT 27)	Complete and sign Form 433F, Collection Information Statement.
Letter 1961C	Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify.
Letter 1962C	Your application for a
Letter 2050 (LT 16)	The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed.
Letter 2257C	The IRS is providing the payoff amount that you requested.
Letter 226-J	An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP).
Letter 2271C	A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information.
Letter 2272C	An IRS letter explaining why your request to pay the balance due in installments was declined.
Letter 2273C	A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included.
Letter 2318C	A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged.
Letter 2357C	The IRS is admitting that it did not send you the balance due notices that it should have.
Letter 2603C	The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property.
Letter 2604C	The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction.
Letter 2761C	The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer.
Letter 2789C	An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid.
Letter 2840C	Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify).
Letter 3030C	Provides an explanation of the tax, penalty, and interest still due on your account.
Letter 3127C	A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities.
Letter 3174	A reminder of taxes due after the IRS has sent a Notice of Intent to Levy.
Letter 3217C	The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify).
Letter 3228 (LT 39)	A request to pay the balance due within 10 days using the envelope provided.
Letter 3500	The IRS has received your documents, and it needs additional time to review them.
Letter 3572	Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment.
Letter 4883C	The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately.
Letter 4903 (LT 26)	You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response.
Letter LP 47	The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address.
Letter LP 59	The IRS has not received a response to the notice of levy it previously sent.
Audit Letter 2205	The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit).
Letter 915	You recently underwent an audit, and the IRS informs you that you now owe taxes.

Key takeaways

IRS Letter 4046 is sent to acknowledge receipt of your appeal request, confirming that the IRS is reviewing your case.
Receiving this letter may temporarily halt certain IRS collection actions, but interest and penalties can still accrue.
It’s essential to respond to any IRS requests promptly and to provide all required documentation to support your appeal.
Working with a tax professional can make the appeal process smoother and improve your chances of a favorable outcome.
Ignoring IRS Letter 4046 or missing deadlines can result in further penalties, interest, and possible collection actions.

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