The IRS mails millions of notices and letters to taxpayers each year. There are a variety of reasons why you might receive a notice. Here are things we want you to know in case you get one.
1. Don’t panic, and don’t grab your checkbook. Call your tax professional to review the letter. We can help you determine whether there is an issue, and help you respond.
2. An IRS notice typically will be about your federal tax return or tax account. It will usually be about a specific issue. It may ask you for more information. It could also say that you owe tax and that you need to pay the amount that is due. Let us check it before you send anything! In our experience, about half the time people who receive letters asking for more money don’t actually owe anything, and some of the rest don’t owe as much as requested.
3. The IRS typically gives you 30 days to respond to their letters, and they expect you to stay within that deadline. Never toss a letter from the IRS into your tax file and figure you’ll show it to us when you come to do your taxes in the spring. Something that is a very small matter that would only take a few minutes to correct in June may have turned into a huge problem by the following March. We are here year-round, and we want to hear from you if you need us.
4. If you do not agree with the notice, it’s important to respond. We will help. We’ll write a letter to explain why you disagree, and include any information and documents we want the IRS to consider. The IRS says that they will consider your response within 30 days. Know that frequently it takes much longer than that. If it is a complex matter, we may ask you to sign a power of attorney giving us the right to talk to the IRS for you. That allows us to contact IRS on your behalf while you go about your day.
5. Even if you do agree with what the IRS says, it’s important to let us review your information. Frequently we can save you money by requesting that penalties be waived, if you qualify.
6. Be sure to keep copies of any notices you receive with your other tax records for the year in question.
7. Be alert for tax scams. The IRS sends letters and notices by mail. The IRS does not contact people by phone, email or social media to ask for personal or financial information.