Receiving a notice from the IRS can cause immense stress before you even have the chance to open the letter. (Note: The IRS will not call or email, so if you are receiving either, it is likely a scam.)
Many people are so apprehensive to confront their tax issues that they let these letters pile up in a junk drawer or, worse yet, simply throw them away and move on with their day. We strongly caution against either of these options, as confronting your tax issues head on is the best way to resolve the problem and avoid any potential fees.
Keep reading to learn the best approach to handling notices from the IRS.
Open the Letter!
We wish this first step went without saying, but our experience tells us that it doesn’t. People often either assume that they already know the contents of the letter or are just too apprehensive to open it. There’s no way to know how to proceed in clearing a tax issue without first knowing exactly what the issue is or how the IRS would like you to proceed. Even if you don’t have time to open the notification immediately, set it aside in a safe place and never throw it away without carefully reading it first.
The good news is that, in most cases, correspondence from the IRS is designed to simply notify the taxpayer of what action the IRS is taking with the account in question or what documents they have or have not received from the taxpayer. And even if action is required on your part, at least you will be aware of what you need to do and whether you need to contact a skilled and experienced tax representation firm like S.H. Block Tax Services.
Check for Errors
As we have explained in the past, the IRS often makes mistakes, so be sure to carefully review all notices you receive and cross-reference the information in the letter with the information on your return (or other tax-related documents). If the IRS has made a correction to your account, there is no need to reply unless you are required to make a payment. If the notice says that you will be billed, sign and return the notice as soon as possible to hasten the billing process and potentially reduce any interest or fees to your outstanding balance.
However, before you sign off on a bill, make absolutely sure that you agree with the notice and are choosing not to contest it. If you disagree with the notice, you will want to respond quickly, explaining why you disagree. Provide a detailed and thoughtful response and include proof of your position as well as any other information you would like the IRS to consider. Also include a copy of the notice you are responding to. In most cases, responding by mail is the most effective approach, but feel free to call before writing to ensure that you fully understand the notice and any actions you might be required to take.
Respond Within a Reasonable Timeframe
Once you have received and read your notice, you should respond by letter or phone to the address or number provided. Make sure you fully understand the contents of the original notice and ask relevant questions related to payment requests, if and how payments have been applied, what changes have been made to your account, or any other concerns you have about the details of the notice you received. In some cases, the IRS will request documentation, so be sure to include copies (never originals) of any proof they require. And if you choose to call, be sure to have your tax returns and the notice handy (and expect to wait on hold for a bit).
A note of caution: Always consider the stakes before responding. In some cases, it is better to choose your battles with the IRS wisely. If the tax liability is relatively small and easily affordable based on your personal income, it might be prudent to avoid having the IRS further review your previous tax returns. Why risk a big problem over a small sum? In these instances, we would suggest you give us a call to request a free consultation and weigh your options before moving forward and potentially causing yourself further headaches.
Save All Correspondence
The only way to prove to the IRS that their records do not align with what you have on file is to keep meticulous records of your own. Find a safe, secure location for these records that is only accessible to you and any other responsible adults you trust. A safe works best, but as long as whatever location you choose has a secure lock, it will serve just fine — a safety deposit box is usually a great option.
In addition, be sure to make copies of all tax returns, notifications, and any other tax-related documents. Losing any of these documents in a flood, fire, move, or through simple disorganization could deal a devastating blow to your financial stability. They might not seem important in the short term, but you never know when some seemingly irrelevant document could be the difference between a major tax liability and a sizable return.
Contact S.H. Block Tax Services for Help with All Your Tax Liability Needs
Let’s review: Whenever you receive a notification from the IRS, be sure to open it, read it carefully, and check for any errors along the way. If there’s anything you don’t understand, please contact S.H. Block Tax Services. Once you feel you understand the letter entirely, call or write the IRS with your approval or disagreement in an expedient manner. And no matter what, save all correspondence you receive from the IRS in a safe place and make copies just in case the unthinkable happens.
Notifications from the IRS are notoriously confusing, and the IRS does tend to make mistakes, so if you are receiving notifications from the IRS that you don’t understand or that you do not agree with, please contact S.H. Block Tax Services by calling (410) 793-1231 or completing this brief and simple form. We offer free consultations and would appreciate the chance to help you reconcile any tax-related issues you might have.
But be sure to reach out quickly, especially if you are receiving threatening notices from the IRS, as they impose strict timeframes on matters related to tax liabilities. The sooner you contact us, the sooner we can get to work helping you and your family get back on track. Together, we can confront your tax issues head on.