6 Tips for Dealing with An IRS Notice
Provided by: Kyle Meissner, CPA, Manager
The Internal Revenue Service (IRS) often sends letters or notices to taxpayers to inquire about their tax returns, inform them of any account modifications or request payments. Receiving correspondence from the agency should not trigger you to panic, but it is also essential to respond promptly. Here’s what to do if you receive a notice from the IRS.
- Don’t panic. The first step is to remain calm and speak with a trusted tax professional. Receiving an IRS notice does not necessarily mean you owe additional taxes or will be audited. Oftentimes, the notice is simply a request for more information or an explanation of specific items on your tax return.
- Read the notice carefully. Make sure you read the notice thoroughly and understand the reason for the communication. IRS notices are typically specific about what they are requesting from you. Does the IRS think you owe more in taxes? Do they owe you a refund? The notice will also include a deadline for responding, which is usually 30 days from the date of the notice. Make sure you mark this deadline on your calendar and plan to respond promptly.
- Review the information. If the notice is related to a tax return you filed, review the original return carefully. If you agree with the information in the notice, it’s wise to make notes about the requested corrections on your copy for your records. Typically, you will only need to take action or contact the IRS if you don't agree with the information, if the IRS requested additional information, or if they have a balance due.
- Take any requested action. If the IRS requests additional information or payment, you can now send them the content they are asking for. If you disagree with the IRS, you can send them an explanation letter stating why you disagree with the notice, including potential supporting documents. You can send it to the address on the contact stub included with the notice, and you should include information and documents for the IRS to review when considering the dispute.
- Keep the letter or notice for your records. Make sure to keep copies of all correspondence between you and the IRS, including any letters or emails that you send or receive. This will help you keep track of the process and ensure you have a record of all communication with the IRS. You can ask the IRS for a penalty removal, which can potentially remove penalties once every three years under the “First Time Penalty Abatement.”
- Seek professional help. If you are unsure about how to respond to the notice or if you need help gathering the necessary documents, consider seeking professional help from an accountant or CPA. We can assist you in understanding the notice and preparing a response, as well as help you navigate the IRS system and ensure you are complying with all tax laws and regulations.
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