Don’t Panic When an IRS Letter Arrives
IRS letter can feel like a scary thing. But it doesn’t have to be. Here are steps to take when that ominous envelope arrives.
Don’t Ignore an IRS Letter
Whether or not the letter has bad news, the situation isn’t going to disappear. Even if you bury it in the backyard. And there’s probably a deadline involved. If you miss it, you could cause yourself real problems.
Read It Carefully
Look to see what specific issue the IRS is contacting you about. See what they want you to do. But before you just do what they want (or you can’t understand what it IS that they want)…
Talk to Your Accountant
As accountants, we’ve seen a lot of notices from the IRS. A lot of them are actually not that scary. But even if they are scary, we may know of steps to take to reduce the impact. Bring the letter into our office, or scan it and email it to us.
Assuming we prepared your tax return in the first place, we can review the specific issue the IRS letter addresses. Maybe they’re disputing your adjusted gross income, or a credit you claimed. Heck, maybe they even want to refund you more money!
If you want to dispute the letter, we can work together to come up with the best response.
And DON’T just send them money without talking to us first. The IRS may have made a mistake – shocking, we know! – or we may know of a way to get a penalty reduced. Or even cancelled altogether (our favorite)!
Review Your Paperwork
If the IRS has an issue with one of your tax returns, find your copy of it. Look at what they’re addressing. If you can’t find your copy, see the step directly above this one (talk to your accountant).
Make Sure It’s Really the IRS Contacting You
Unfortunately, there are a LOT of scams going on right now. Someone contacts you and says you have to pay IMMEDIATELY. Or they send you a link, tell you to click on it and enter your personal information.
In fact, the IRS will NEVER email you or text you. Usually they send a letter, or – only rarely – call you. They will always give you the chance to dispute any issue, and will not threaten you with jail the first time they contact you.
Talk to your accountant (we say that a lot, don’t we?) to make sure it really IS the IRS contacting you. And NEVER click on that link!
The IRS wants you to report “phishing” scams, when someone is trying to get your money or info.
If you need to make a big payment after, the IRS will set up a payment plan with you.
Lastly, you can learn more about our services here!