Receiving a letter from the IRS may feel alarming, but the IRS sends millions of letters and notices to taxpayers for a variety of reasons. Many of these letters and notices can be easily dealt with without having to call or visit an IRS office. Below are some things you should know if you receive a notice or letter from the IRS.
Reasons for Letters
A letter or notice from the IRS doesn’t necessarily mean you’re being audited or have an issue. Some letters don’t even require a response. The IRS sends notices and letters for the following reasons:
• You have a balance due.
• You’re getting a larger or smaller refund.
• You need to verify your identity.
• The IRS needs more information about your return.
• The IRS changed your return.
• Processing your return has been delayed.
To get details on an IRS notice or letter, you can search for it by number or topic using the notice number beginning with “CP” or “LTR” number, often found on the right corner of the letter. You can handle most of this correspondence without calling or visiting an IRS office if you follow the instructions in the document.
Actions Required
Typically, an IRS notice is about a specific issue, such as a change to your federal tax return or tax account. Each letter and notice offers specific instructions on what action you need to take. It may ask you for more information. It could also explain that you owe tax and that you need to pay the amount that is due.
If you receive a correction notice, you should review the correspondence and compare it with the information on your tax return. If you agree with the correction to your account, then usually no reply is necessary unless a payment is due or the notice directs otherwise.
You should keep copies of any notices you receive with your other tax records.
Disputing Corrections
If you do not agree with a correction the IRS made, your tax professional can help you to prepare a written explanation to send to the IRS regarding why you disagree and determine any information the IRS should consider that supports your case. You should hear from the IRS within 30 to 60 days regarding your correspondence.
Tax Scams
The IRS typically sends letters and notices first by US mail. The IRS does not contact taxpayers by email or social media to ask for personal or financial information. If you are contacted other than by mail, it is likely be a scam. Some common telephone scams involve threats of prosecution by the IRS unless a payment is made immediately.
If you have received a letter or notice from the IRS and have questions or concerns, don’t hesitate to call.
If you have questions about this featured topic or other accounting and tax related topics, please do not hesitate to contact us at 727-327-1999 OR [email protected].
ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.
