What does it mean if you receive a letter from the IRS stating you owe the exact amount that was 'charged off' four years ago on a credit card?

Obligations For Amounts Charged OffThe cancellation of debt from the credit card company is counted as income for you. Therefore it must be reported to the IRS as income. Since taxes were not paid the IRS is expecting payment on this income. There may be penalties assessed for the failure to report the income. It makes no difference if the creditor did not provide you Form 1099-C; it is your responsibility to report the income.

Such amounts may be included in your income, but are subject to several very important exclusions. Consult a tax advisor regarding this letter -- generally as many as 80% of individuals receiving such letters need not make any change to their tax situation.