Gerald Winters, Esq., CPA
What Can You Do - Or Not Do - If You Receive an IRS Tax Notice
You compiled all the necessary documents, tallied a year’s worth of income, searched for deductible expenses and filed your annual income tax return on time, only to receive a tax notice in the mail some time later from the Internal Revenue Service.
Do not worry; there is no need to panic. A tax notice does not automatically mean you are being audited. The IRS sends different letters for different reasons, and not all of them are about audits. For instance:
- The IRS may be letting you know they changed information on your tax return.
- You may be asked to answer questions about your return.
- A letter may be a request for additional information.
- You may be asked to verify your identity.
The agency also could be informing you about processing delays, or that an expected refund is going to be larger or smaller than you originally thought. In addition, it is definitely possible the IRS would contact you if they believe you owe more in taxes than what was stated on your return.
First, here is what not to do:
- Do not ignore a tax notice. Failing to respond, if required, is a surefire way to cause more problems.
- Do not reply if you do not need to.
- Again, do not panic. Almost every initial IRS inquiry boils down to either changing your return, or a request for some type of information.
Even if you are being audited a prompt and complete first response is the best course of action. It will also help mitigate potential penalties and interest fees, if applicable.
Other actions to keep in mind, include:
- Carefully reviewing IRS-made amendments to a previously filed tax return. Compare the agency’s changes to your original return and determine whether you agree.
- Immediately contact the IRS if you disagree with a received tax notice.
- Promptly send any agreement reply forms and payments to the IRS if you consent.
- Maintain detailed records of your tax returns and keep track of all IRS correspondence.
Consider contacting an experienced attorney for more information, and assistance.