The IRS sent me a letter. How bad is this?
Probably not as bad as you think. Take a breath, then look at the letter carefully.
Most IRS letters are notices, not audits. A notice means the IRS has a specific question or found something they want addressed. Common examples include CP2000 notices where the IRS thinks you didn’t report income that a payer reported to them, balance due notices for an unpaid amount, identity verification requests, or simple corrections to a calculation. These are routine correspondence. The IRS sends millions of them every year. They ask for a specific response, and once you respond correctly, the matter closes.
Even when the letter is an actual audit notice, it’s a process with defined steps and deadlines. The letter will specify what tax year and what items the IRS wants to review. It will tell you what documentation they need and when they need it. An audit is not a verdict. It’s a request to verify what you reported on your return.
What matters is responding correctly and on time. The first step is reading the letter carefully to understand exactly what it says. IRS letters have notice numbers and specific language that tell us what is being asked. Many people panic before they actually understand what the letter says. The second step is identifying what documentation is needed. The third step is assembling that documentation from your records. Then drafting the response and submitting it before the deadline.
This is where tax audit support comes in. Hunter Green CPA reads the letter, figures out what the IRS is actually asking for, gathers the documentation from your records, drafts an appropriate response, and tracks the deadlines so nothing slips through.
Clean books do most of the heavy lifting in these situations. When your records are organized and accurate, finding the documentation to support your position is straightforward. The books show what happened. Bookkeeping for medical businesses done right throughout the year means that responding to an IRS letter becomes a matter of pulling the relevant records rather than reconstructing history from memory and bank statements.
If you received a letter and want help understanding what it means and how to respond, book a consultation. We can walk through it together and figure out the right next step.
Your Trusted CPA
Next Step:
A Short Conversation
Tell us about your business and what you need help with. We'll ask a few questions, explain how we can help, and tell you exactly what it will cost.
More Questions
What will a buyer want to see if I sell my business someday?
Buyers want multiple years of clean books, documented and transferable revenue, margins that hold up under analysis, worker classification that survives review, and known liabilities. The uncomfortable truth is that sellable financials are built years before the sale, one clean month at a time.
Read answerWhat financial habits should I build in my first year of business?
The habits you build early cost almost nothing to maintain and make everything easier later. Separate banking, monthly bookkeeping, tax reserves, and clean digital records form the foundation.
Read answerA client prepaid for a package of sessions. Is that income now?
No. Until the sessions are delivered, that money is a liability, not income. You recognize revenue as each session is completed, not when the payment arrives.
Read answerAm I supposed to collect sales tax at my spa?
Probably yes, at least on retail products. Services like injectables are typically exempt, but skincare, supplements, and take-home products are usually taxable. The rules vary by state, and uncollected tax becomes your personal liability.
Read answerPayroll is due Friday and the payers have not paid. How do agencies survive this gap?
The gap between payroll deadlines and payer reimbursement is manageable when you know your numbers. Track each payer's real lag time, hold a cash cushion sized to cover payroll through it, and keep the books current so the gap is a known number instead of a monthly scare.
Read answerWhy is ABA practice bookkeeping its own animal?
ABA practices have a financial structure unlike most other medical businesses. Hourly behavior technician payroll dominates expenses, authorization gating controls when revenue can even exist, and receivables run long while payroll goes out every week.
Read answer

