IRS Notice – What to do if You Receive One

Every year, the Internal Revenue Service sends millions of notices and letters to taxpayers. The IRS sends notices for various reasons, typically for problems with a prior tax return. The IRS takes several months to process returns and they normally start sending a strong push of IRS notices to taxpayers beginning mid June each year.

Here are a few things to keep in mind if you receive an IRS notice:

Do not panic and make things worse on yourself. Just because you receive an IRS notice does not mean that you owe thousands of dollars or are heading directly to prison. Many of these notices can be dealt with quickly and easily. An IRS notice will more than likely cover one very specific issue. Some of the most common include: notify you of a change to your account, request payment of back taxes, or ask for additional information. Make sure you read your IRS notice carefully so you know what is being asked of you. If you receive an IRS notice asking for a correction, compare this information to your return to see if it is accurate. Is the correction accurate? If so, you probably do not need to do anything else. Of course, if you owe money or the notice tells you that further action is needed you should comply. What about a correction that you do not agree with? In this case, you need to take additional steps to fix the problem. It is your responsibility to respond in writing telling the IRS why you do not agree. Along with this explanation, you should include documents that back up your claim. After doing so, you should give the IRS up to 30 days to respond. You are not left out in the dark when you receive a notice. Instead, the IRS includes specific instructions that you are asked to follow. Most IRS notices are self explanatory. The majority of people who receive a notice do not need to call the IRS or visit a local office. But if you do have a question or concern, you can contact the IRS at the number listed on your notice. Keep copies of all notices and letters that you receive. Along with this, make copies of any correspondence that you send back.

Are you interested in learning more about IRS notices? If so, you should review Publication 594, The IRS Collection Process. Also, details concerning penalties and interest are available in Publication 17, Your Federal Income Tax for Individuals.

If you receive one of these, there is no reason to panic. The IRS sends notices to millions of taxpayers, and as long as you comply with their request you do not have anything to worry about. Typical IRS notices are part of an automated procedure used by the IRS and if there is a serious problem, you will have time fix. Be sure to keep in mind that the IRS is willing to work with taxpayers on any tax problem and the sooner it is resolved, the less the consequences will be.