How to handle an IRS letter or notice
The IRS mails millions of letters every year to taxpayers for a variety of reasons.
The IRS will soon be mailing letters to taxpayers who filed their 2018 tax returns and owe taxes. Additionally, the IRS will be sending CP2000 notices to taxpayers whose tax returns didn’t match the data from the IRS records. Keep the following suggestions in mind on how to best handle a letter or notice from the IRS:
1. Don’t panic. Simply responding will take care of most IRS letters and notices
2. Don’t ignore the letter. Most IRS notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. Read the letter carefully; some letters or notices require a response by a specific date.
3. Respond by the deadline. A notice may likely be about changes to a taxpayer’s account, taxes owed or a payment request. Sometimes a notice may ask for more information about a specific issue or item on a tax return. A timely response could minimize additional interest and penalty charges.
4. If a notice indicates a changed or corrected tax return, review the information and compare it with your original return. If the taxpayer agrees, they should note the corrections on their copy of the tax return for their records. There is usually no need to reply to a notice unless specifically instructed to do so, or to make a payment.
5. Taxpayers must respond to a notice they do not agree with. They should mail a letter explaining why they disagree to the address on the contact stub at the bottom of the notice. Include information and documents for the IRS to consider and allow at least 30 days for a response. Keep a copy of everything for your records.
6. For most instances there is no need to call the IRS or make an appointment at a taxpayer assistance center.
7. If a call seems necessary, use the phone number in the upper right-hand corner of the notice. Be sure to have a copy of the related tax return and notice when calling. Write the employee’s name, badge number and the time and date when calling the IRS. Treat IRS employees with courtesy and respect. If you believe the IRS employee is not correct or not performing their job, ask to speak with their supervisor. Write the supervisor’s name and badge number.
8. Always keep copies of any notices received with your tax records.
9. The IRS and its authorized collection agency will send letters and notices by mail. The IRS will not demand payment a certain way, such as prepaid debit or credit card. Taxpayers have several payment options for taxes owed.
If you are not familiar with the IRS issues in the IRS letter or notice, consider contacting a tax professional.
David Zubler is a tax accountant in East Tennessee, the author of three books, and a philanthropist. All of his proceeds from the books go to a charitable foundation he created for underprivileged children. He is also the founder of Your Tax Care which provides tax education. David can be reached for questions and consultation at yourtaxcare.com.