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What To Do If You Received An IRS Letter?

Every year, the IRS dispatches millions of letters to taxpayers. Depending on the motive of each notice, some will require a response while others will merely remind us that it’s about time to start filing our tax returns. All of them, however, will either be pleasant or unpleasant surprises!

An IRS notice is intended to update you on a mistake that relates to your tax returns and maybe you qualify for a refund. Another one could be requesting that you update your address or inform you of your eligibility for goodies like Additional Child Tax Credit.

Have you received a letter from the taxman and you are feeling sweaty already?

It’s not every day that you are mailed an audit notice, so never feel anxious or panic in any way. You’ve got to remember that an IRS letter is never a death sentence or a warning bell that the big brother is coming for you!

So, if a missile from the IRS lands in your mailbox, the following are what you are advised to do:

  1. First, don’t panic or ignore the letter. Mostly, the IRS uses notices to inform taxpayers about federal tax returns and tax accounts. Moreover, they ensure each of them comes with clear instructions on what to do upon receiving it. They also include an ample amount of time needed to respond.
  2. Next, go through the whole letter, of course, soberly to determine the type of IRS notice you received it is and if it is legit. Maybe the letter is sent to you because of a slight glitch that only needs your little attention. Or it’s something serious!

Ideally, common triggers are:

  • Overpaid taxes upon filing your return.
  • Mismatched information – often happens when there’s a discrepancy between your 1040 and that from your bank or brokerage.
  • Correspondence audits – this usually happens when the IRS spots a red flag on your return.
  • An audit request – often triggered by underpayment regarding your quarterly estimated taxes if you are self-employed.
  • Balance-due notices – Notice CP14 details that you underpaid your tax payments. Usually, this comes as a warning with a 10-day period of filing a response.
  • A final notice and intent to levy – when you get Notice CP90, know that things are set to go south! Thankfully, you’ll have 30 days to ‘co-operate.’
  1. After you’ve determined what it is and the corresponding instructions on it, you might have to consult a tax professional. You’ll be guided on the right step to follow. But more than that:
  • Respond in a timely manner; it doesn’t matter whether it’s nothing big or a serious issue. Explain to them “why and how,” plus all the right details. If it’s something you disagree with, send them a reply with an explanation of your issue of disagreement.
  • If possible, include a tear-off portion of their notice. There’s no need to call them when you can write. Also, IRS can take up to 30 days to respond so, keep calm.

It is important to store all your copies of any notices along with your tax records. Never panic or ignore any warning, especially when they need a response from you. It might cost you if you eventually ignore them.


TOLF Accounting & Tax Queens 147-17 Union Turnpike #3A Flushing, NY 11367 (718) 591-1000 tolfaccountingny.com

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