The IRS mails millions of notices and letters to taxpayers every year. This can be extremely upsetting when receiving this form of communication, whether it is from the IRS or any other taxing authority. Here are some suggestions to help formulate specific action plan for any correspondence received from the IRS (or from your state or local taxing authority).
Don’t Panic: You can usually deal with a notice simply by responding to it. You should immediately contact your tax adviser to discuss this matter in more detail. Waiting or ignoring the notice can only compound and complicate your tax problems. Each notice has specific instructions, so read your notice carefully because it will tell you what you need to do. Follow the instructions very carefully and give a specific and detailed response to the tax issue in question.
Your notice will likely be about changes to your account, taxes you owe or a payment request. However, your notice may ask you for more information about a specific issue. Only respond to the particular issue and do not provide or discuss issues that are not being raised by the IRS. Do not assume that the taxes owed are correct. In many cases, the IRS calculates taxes without all the relevant facts.
If your notice says that the IRS changed or corrected your tax return, review the information and compare it with your original return. Just because the IRS says you owe taxes does not mean that they are correct.
If you don’t agree with the notice, you must respond within the time limit set out in the notice. Write a letter that explains why you disagree, and include information and documents you want the IRS to consider. Mail your response with the contact stub at the bottom of the notice to the address on the contact stub. Always include a copy of the notice they sent you. If a fax number is provided, use it. Allow at least 30 days for a response from the IRS. The safest route is to have your tax adviser craft a well-conceived response that is supported with references to the relevant facts of your situation and the tax law in question.
If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to make a payment. If you choose not to respond to the IRS be sure you understand the IRS letter and its implications, because the next step from them is usually an assessment of additional taxes.
For most notices, you won’t need to call or visit a walk-in center. If you have questions, call the phone number in the upper right-hand corner of the notice. Be sure to have a copy of your tax return and the notice with you when you call. Waiting time could easily exceed an hour. Be careful when talking with the IRS; they are not your friend. Only speak to the specific issues in question.
Warning: Be alert for tax scams: The IRS sends letters and notices by mail. They don’t contact people by email or social media to ask for personal or financial information.
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