What to do if you Receive a Notice from the IRS
Nothing sparks more fear in taxpayers than receiving mail from the IRS. Their first instinct is to ignore the letter hoping the matter will magically go away. This is actually the worst thing you can do as the IRS will not go away simply because you ignore their letter. Instead, follow these guidelines.
- Do not panic. Remember that the IRS will not email, text or call you, nor communicate with you through social media. The only way the IRS has to communicate with you is through the mail. The letter may simply be informing you of a change to your return or refund amount, or it may be seeking information from you.
- Open the letter immediately. If any action is required, the letter provides the time by which action needs to be taken. Failure to take action within the deadline may lead to a loss of procedural rights or complicate the matter needlessly.
- Read the letter carefully. Each letter deals with a specific issue and will advise you if you need to take action. Most IRS letters relate to your federal tax return or your tax account. Taking prompt action not only preserves rights you may have, but may also minimize interest and penalties.
- Review the information contained in the letter. If the IRS is alerting you to a change made on a filed tax return, compare the information on the letter with your copy of the filed tax return. If you agree with the changes being made by the IRS, notate your records to reflect the changes made to the filed return and make sure to have this information available when you prepare next year’s return. If you do not agree with the changes the IRS is making, then contest the changes the IRS is proposing by taking action as instructed in the letter.
- Take action if instructed to do so. If the letter is asking for additional information, provide the IRS the information requested. If the letter is advising you about unfiled returns, submit the delinquent returns. If the letter is advising you about a balance due, take steps to resolve the balance to minimize interest and penalties.
For other matters, if you agree with the contents of the letter, no action may be necessary. Note that the IRS letter will impose a time deadline to take action and you must take timely action. Calling the IRS is not sufficient for resolving the matter. You must take the action which the IRS has instructed must be taken, and in the manner set forth in the letter.
- Keep copies of the letter received from the IRS. If you have responded to the letter, also keep copies of your response and the documents you provided the IRS. If you respond by mail, send the documents in a trackable format and keep proof of the mailing and delivery of the package.
- Consider hiring a tax professional. Remember the IRS is not your friend and is not there to provide you with legal advice. Although the IRS cannot lie to you, the IRS is there to protect the government’s interest and not yours. In essence, the IRS is your adversary and has attorneys to represent them. Note that the IRS will maintain records of what you tell and send them. Your statements, which may seem innocent to you, can come back to haunt you in the future. Hiring a knowledgeable tax professional may be in your best interest.