Expanding on one of our posts last week, which discussed how to tell whether a phone call from the IRS is a scam, we turn to what to do if you receive a letter from the IRS, which is their preferred initial method of communication.
It should be noted that the Internal Revenue Service sends out millions of letters every year — most are not cause for alarm. Below is a list of Dos and Don’ts.
The following information is pulled from this article on Accounting Today:
- Don’t ignore it. Each IRS letter deals with a specific issue and includes specific instructions on what to do.
- Don’t panic. Usually, all the taxpayer needs to do is read the letter carefully and take the appropriate action.
- Do act in a timely manner. A notice may reference changes to a taxpayer’s account, taxes owned, a payment request, or a specific issue on a tax return. Acting promptly could minimize any additional interest and/or penalty charges.
- Do review the information. If a letter mentions a changed or corrected tax return, the taxpayer should review the information and compare it to the original return. If the taxpayer agrees, they should make notes about the corrections on their personal copy of the tax return, keep it for their records, and communicate with their tax preparer, if necessary.
- Don’t reply unless instructed to do so. There is usually no need for a taxpayer to reply to a notice unless specifically directed to do so. However, taxpayers who owe should reply with a payment. Information about payment options is available on IRS.gov.
- Do respond to a disputed notice. If a taxpayer does not agree with the IRS, that person or his/her tax professional should mail a letter clarifying why they dispute the notice and include information and documents for the IRS to review when considering the dispute. The letter should be mailed to the address on the contact stub at the bottom of the notice and the taxpayer should allow at least 30 days for the IRS to respond.
- Do remember that there is usually no need to call the IRS. If a taxpayer must contact the IRS by phone, he or she should use the number in the upper right-hand corner of the notice and have a copy of his or her tax return and letter when calling. The IRS does conduct some business by phone, but they never initiate contact by phone.
- Do avoid scams. The first contact from the IRS usually comes in the mail. The IRS will never initiate contact using social media or text message. Taxpayers unsure if they owe money to the IRS can view their tax account information on IRS.gov.
Give us a call if you ever receive a letter from the IRS and need assistance responding to a notice.