Letter 566D Guide: What to Do When You Get One
Summary:
IRS Letter 566D, often referred to as the “Initial Contact Letter,” is an official notification sent by the IRS to inform taxpayers that their tax return has been selected for further review. Receiving this letter can be concerning, but it doesn’t necessarily indicate a problem with the return. Instead, the IRS may simply need additional documentation to verify the information reported. This article will help you understand why you received this notice, the steps to take, and how to respond efficiently to prevent delays in processing your return.
Getting a letter from the IRS can be alarming, especially when it’s about a review of your tax return. The IRS Letter 566D, known as the “Initial Contact Letter,” informs you that the IRS has selected your tax return for examination. While this may feel unsettling, it doesn’t imply an error on your part. The letter indicates that the IRS requires more information to verify certain details on your return. Understanding what the letter means, knowing how to respond, and gathering the correct documentation can make the process smoother and ensure that your tax return is processed without unnecessary delays.
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What is IRS Letter 566D?
The IRS sends out Letter 566D, the “Initial Contact Letter,” to let taxpayers know that additional information is needed to complete the review of their tax return. This letter doesn’t necessarily mean there is an issue with your return, but rather that the IRS needs clarification or documentation to confirm specific items you reported. Often, the letter pertains to claims like deductions, tax credits, or income details that require supporting evidence.
Purpose of IRS Letter 566D
The primary purpose of Letter 566D is to request documentation that supports the information you provided on your tax return. For instance, if you claimed a particular tax credit or deduction, the IRS may need evidence to substantiate it. This can include forms like W-2s, 1099s, receipts, or other financial records that verify your reported income, deductions, or credits. The IRS uses this process to ensure compliance and accuracy in taxpayer filings, helping to minimize errors and reduce fraud.
Understanding the IRS verification process
Once the IRS receives your supporting documentation, their team will review it to determine whether it validates the details reported on your tax return. If the information aligns with your filing, they will continue processing your return. However, if there are discrepancies or missing documentation, the IRS may request additional information or make adjustments to your return. Knowing what to expect can help you stay organized and respond efficiently.
Pro Tip
Keep copies of all documents you submit to the IRS in response to Letter 566D. Organized records help you track your submissions and make follow-ups easier if needed.
Why did I receive IRS Letter 566D?
Letter 566D is typically issued when the IRS requires more information to confirm specific details on your tax return. Several factors may trigger this notice, including:
- High-value deductions that are commonly subject to verification
- Income discrepancies based on third-party reports from employers or financial institutions
- Unusual tax credits or deductions claimed on the return
Receiving this letter doesn’t mean you’ve done something wrong—it’s simply a standard procedure to validate the accuracy of your filing.
Examples of items under review
Items commonly subject to review include charitable donations, business expenses, or education credits. If any of these items appear unusually high or fall outside the norm for taxpayers in your income bracket, the IRS may seek clarification.
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.
What should you do when you receive IRS Letter 566D?
When you receive Letter 566D, it’s essential to respond promptly. Here’s how to handle it:
- Read the letter carefully to understand exactly what information the IRS needs. Each letter specifies the documentation required and provides instructions on how to submit it.
- Gather the requested documents and double-check to ensure all information is accurate.
- Make copies of all documents before sending them, as these are part of your records.
- Respond by the specified deadline to avoid any delays in processing your return.
- Submit the documents as outlined in the letter, either by mail or through the IRS’s online portal if available.
Taking prompt action and submitting complete documentation will help streamline the review process.
How to respond to IRS Letter 566D
Steps for responding effectively
To avoid delays, follow these steps when responding to Letter 566D:
1. Review the letter for detailed instructions on where and how to send your documents.
2. Organize your paperwork according to the IRS’s requests. For example, if you’re providing W-2s or receipts, label them clearly.
3. Mail or upload your documents following the IRS’s specified format.
4. Keep a record of your submission in case you need to follow up with the IRS.
1. Review the letter for detailed instructions on where and how to send your documents.
2. Organize your paperwork according to the IRS’s requests. For example, if you’re providing W-2s or receipts, label them clearly.
3. Mail or upload your documents following the IRS’s specified format.
4. Keep a record of your submission in case you need to follow up with the IRS.
Tips for a smooth response
If you’re unsure about any part of the letter or the required documents, consider consulting a tax professional. They can help you interpret the request and ensure that you submit the correct information, reducing the likelihood of further delays.
Pro Tip
Consult a tax professional if the requested documents are complex or if you’re unsure about your response. A professional can provide guidance and help avoid errors that may delay processing.
Other ways to handle IRS Letter 566D
In some cases, taxpayers may suspect identity theft or errors in third-party reports. Here are additional steps you can take:
- Check your IRS records online to confirm that there are no issues or mismatches in your reported information.
- Contact the IRS directly if you need clarification or have questions about the letter.
- Consider a tax professional’s assistance, especially if your tax return includes complex elements like business expenses or foreign income.
Taking these extra steps can help you resolve the notice more smoothly and avoid future issues with your account.
Potential penalties or next steps if you don’t respond
Ignoring Letter 566D can lead to delays, additional scrutiny, and potentially more penalties. Here’s what could happen if you don’t respond:
- Your tax return may be adjusted or rejected, leading to a delay in your refund.
- Additional penalties or interest may accrue if discrepancies are found.
- In rare cases, failure to respond could result in IRS enforcement actions, such as garnishing wages.
It’s essential to respond on time to avoid any further consequences.
Possible outcomes after responding to IRS Letter 566D
Once you submit your documents, the IRS will review them. Possible outcomes include:
- Return acceptance: If the documents are sufficient, the IRS will process your return as submitted.
- Request for further information: If the IRS needs more clarification, they may reach out again.
- Adjustments to your return: If the IRS identifies an error, they may adjust your return and provide an explanation.
Responding promptly and ensuring the accuracy of your documents can help resolve the review as quickly as possible.
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Frequently asked questions
What is the main purpose of IRS Letter 566D?
IRS Letter 566D, also known as the “Initial Contact Letter,” is sent when the IRS needs additional documentation or clarification regarding specific items on your tax return. This letter doesn’t indicate wrongdoing but instead requests supporting documents to verify your claims, such as deductions, credits, or income.
How should I prepare my documents for submission to the IRS?
When preparing your documents, ensure that each document clearly supports the information you reported on your tax return. Organize them based on the IRS’s request, make copies for your records, and label any specific items (like W-2s or receipts) to avoid confusion. Follow the submission instructions in the letter, whether by mail or online.
What should I do if I suspect identity theft related to IRS Letter 566D?
If you believe identity theft might be the reason for receiving Letter 566D, review your IRS records through their online portal or contact the IRS directly for clarification. You may also consider enrolling in the IRS’s Identity Protection PIN (IP PIN) program, which provides a unique filing code to prevent unauthorized filings under your Social Security number.
Can I request an extension if I need more time to gather documents?
If you are unable to meet the deadline for responding to Letter 566D, you may contact the IRS to request an extension. It’s best to make this request as soon as possible, explaining why additional time is needed. An extension may be granted based on your specific circumstances, helping you avoid potential penalties for late response.
What if I can’t resolve the issue even after submitting my documents?
If the issue remains unresolved after you’ve submitted your documents, consider reaching out to a tax professional or the IRS Taxpayer Advocate Service (TAS) for additional support. TAS provides assistance to taxpayers facing ongoing issues with the IRS. They can help if you’re experiencing delays or if your case becomes more complex.
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.
| 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 566D is an initial contact letter requesting additional documentation for review.
- Respond promptly with the requested documentation to avoid delays or adjustments to your return.
- Consider consulting a tax professional for help with complex returns.
- Ignoring the letter may result in penalties, delayed processing, or IRS adjustments to your return.
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