Though out the year, we get emails from a handful of clients who have received a tax notice from a government agency. Believe it or not, the vast majority do not result in the client paying money. But still, it is nerve-racking for our clients, especially since they are due to an IRS oversight.
The IRS also offers some tips:
- Don’t panic. Many of these letters require a simple response.
2. There are many reasons why the IRS sends correspondence. If you
receive an IRS notice, it will typically cover a very specific issue about your
account or tax return. Notices may require payment, notify you of changes to
your account or ask you to provide more information.
3. Each notice offers specific instructions on what you need to do to
satisfy the inquiry.
4. If you receive a notice advising you that the IRS has corrected your
tax return, you should review the correspondence and compare it with the
information on your return.
5. If you agree with the correction to your account, then usually no
reply is necessary unless a payment is due or the notice directs otherwise.
6. If you do not agree with the correction the IRS made, it is
important that you respond as requested. You should send a written explanation
of why you disagree. Include any information and documents you want the IRS to
consider with your response. Mail your reply with the bottom tear-off portion
of the IRS letter to the address shown in the upper left-hand corner of the
notice. Allow at least 30 days for a response.
7. You should be able to resolve most notices that you receive without
calling or visiting an IRS office. If you do have questions, call the telephone
number in the upper right-hand corner of the notice. Have a copy of your tax
return and the notice with you when you call. This will help the IRS answer
your inquiry.
8. Remember to keep copies of any notices you receive with your other
income tax records.
9. The IRS sends notices and letters by mail. The agency never contacts
taxpayers about their tax account or tax return by email.
Your CPA can help you muddle through these letters. A CPA usually deals with these letters and understands how to respond. For example, just today I received a call from a client who was assessed for a late filing fee for a return a prior accountant filed. However, I probably got the penalties abated because of a little-known exception.
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IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the U.S.
Department of the Treasury and Internal Revenue Service, we inform you that any
tax advice contained in this e-mail (including any attachments) is not intended
or written to be used, and may not be used, for the purpose of (a) avoiding
penalties under the Internal Revenue Code or state tax authority, or (b)
promoting, marketing, or recommending to another party any transaction or
matter addressed herein.