The Internal Revenue Service sends millions of letters and notices to taxpayers for a variety of reasons each year. Here are some things to know if you receive one.
- Don’t panic. Many issues these notices address can be addressed painlessly and simply. Since most notices are time sensitive, forward copies to your tax professional as soon as possible. Most initial notices are in a ‘proposed format’ and not ‘final,’ so your representative may be able to assist you negotiating them.
- They’re normally a very specific issue. For example, IRS notices can request additional information, notify you of a change in your account or request a payment of taxes.
- Look for specific instructions. Each letter or notice offers specific steps to follow to satisfy the inquiry. They all have very specific information in the upper right quadrant of the letter, such as type of tax, applicable year, tax payer[s], the notice number and the date of the notice. If the notice is asking you to provide additional data, please contact your tax professional to ensure that the additional data being requested is correct.
- Review corrections. If you receive a correction notice, be sure to compare the correspondence with information on your return. All corrective notices need to be brought to the attention of your tax professional to ensure that current ongoing tax information is adjusted accordingly.
- If everyone agrees with a correction to your account, usually there’s no further correspondence needed. The notice will instruct you where to send any payment due or if additional action is needed.
- If everyone does not agree with the proposed IRS correction, a response to the notice will be required within the time frames allotted in the notice. We strongly suggest that all correspondence and explanation be prepared by your tax professional. Many notices have proposed penalties that can often be softened or abated with a properly-drafted response.
- Most correspondence can be handled without calling or visiting an IRS office. However, you can call the telephone number in the upper right-hand corner of the notice. Having a copy of your tax return and the notice when you call will help IRS staff members respond more efficiently to your inquiry. However, taxpayers should exercise great caution when talking to the IRS.
- Keep copies of any correspondence for your records. When communicating with the IRS it is imperative that an accurate written history be maintained to document what was said, by whom and what further actions need to be taken and when.
- Don’t panic !!
Your Rea Associates tax professional can assist you in responding to IRS letters and notices, and can often you save time, stress and additional correspondence. If you have recently received an IRS notice, click here to contact our Ohio tax professionals.