The IRS recently published Summertime Tax Tip 2016-05. This article provides taxpayers with some helpful tips on what they should know about the millions of letters the IRS send out every year. The letters are used to communicate with taxpayers about errors and changes to tax returns. A common reason for a letter is omitting income on your tax return, such as interest from a savings account you forgot to report. The IRS will send a letter noting the correction and requesting payment for the additional tax due. A notice from the IRS may sound scary, but they can often be easy to address.
What should you do if you receive a notice from the IRS? The IRS suggests the following steps:
- Don’t ignore it – The issue won’t go away by ignoring the notice. The IRS will continue to send notices and if payment is owed, they can take collection actions.
- Follow the instructions – When you receive a notice, make sure to read it carefully. Not all notices require further action by you. It may have a date that you need to respond by. It will also have contact information that can be used to help address the notice.
- Focus on the issue – The notice will explain while the IRS is contacting you. The IRS often is working with incomplete information and therefore the changes they request may be incorrect. Make sure that the IRS is correct before mailing in a check.
- Correction notice – If the IRS corrected your tax return, you have two options:
- Agree with the changes – If you agree with the changes, you don’t need to reply unless you owe additional taxes.
- Disagree with the changes – If you disagree, you can contact the IRS by mail or possibly by phone to explain why you disagree. You will need to explain why you disagree and provide relevant information.
- Keep the notice – Keep a copy of the notice with the rest of your tax records so you can reference it in the future if needed.
It’s important to remember that there various scams where scammers act like the IRS. We have had a couple recent blog post identifying some of these scams:
If you receive a letter from the IRS, we would be happy to look over it with you or help respond. Feel free to contact us if you’d like help.