When corresponding with a taxpayer, the IRS uses the “address of record,” which is generally the address given on the taxpayer’s last return.
IRS policy requires the taxpayer to provide “clear and concise” notice of any change of address.
When the IRS sends a notice or document to a taxpayer’s “last known address,” it is legally effective even if the taxpayer never receives it.
When the IRS sends a notice and it is returned they then send Letter 2797 for the taxpayer to confirm that the address is correct or to advise on the correct address.
The IRS maintains a research tool, the Address Research (ADR) system, to attempt to perfect or locate a “good” or “better” address. Most of these are collection-related notices such as balance due (that is the code 501 on the letter), return delinquency, intent to levy, or installment agreement default notices.37 When it identifies potential addresses, the IRS issues Letter 2797, commonly referred to as the “Are You There” letter. This letter is generated and mailed to all potential taxpayer addresses, asking the taxpayer to confirm the address and sign and return the letter.
You should call the IRS or return the letter. If they are showing a balance due for you and they are not correct then you can take steps to correct before the situation gets worse.