So, you received a letter in the mail from the IRS. Before you start to panic, the first thing you need to do is open the letter to see if it’s legit and what it’s all about. Who knows, maybe they owe you a refund, or not. Below are some tips to help handle the situation if you receive a letter from the IRS in the mail.
- Don’t overreact. The IRS sends out millions of notices each year. The majority are often due to common errors or a simple oversight that needs to be corrected.
- Open and Review the letter. For some, just receiving a letter from the IRS makes their blood pressure rise. Stay calm. Review the letter to see if something needs to be changed and if you agree with the findings. Sometimes the IRS will send a letter informing you of a correction, in your favor, or maybe they found an error that needs corrected such as a missing signature or Social Security number.
- Respond in a timely manner. The IRS will be clear about the action you should take as well as the timeframe the action should be completed. Any delay in your responses may result in penalties and additional interest payments.
- Seek assistance. The process will go much smoother if you get help from someone (CPA) that deals with this sort of thing all the time.
- Correct the error. Once you understand the problem, write a clearly written reply and attach copies of documentation to correct the errors. Sometimes just pointing out the information on your return may be all it takes to resolve the issue.
- Certified mail. To provide proof of your timely response, always send your correspondence via certified mail. If your letter were to be lost and cause a delay, it may result in penalties and additional interest on your tax bill.
Don't think the problem will just go away if you ignore it. You should assume the IRS still thinks you owe them money until you receive confirmation that your letter was received and the issue been resolved. If you don’t receive confirmation that your correspondence has been received within a reasonable timeframe, you are required to write follow-up letter.
At Summit CPA we offer multiple resources to assist you with all of your tax and financial planning needs. Contact our office at 866-497-9761 to schedule an appointment with our advisors.