When the IRS Comes Knocking

Every year the IRS sends out notices and letters to taxpayers, requesting updates to their records, payments of taxes, fees, interest and penalties as well as a whole plethora of information. If you are the gracious recipient of any such correspondence, the most important thing you can do, is to not panic!

Although, unexpected and sometimes disquieting, a letter or notice from the Internal Revenue Service, can more often than not, be dealt with quickly and efficiently.  Most letters are seeking to correct or corroborate something very specific about your account or your tax return. The letter will contain specific instructions about what you need to do, who you may need to contact and where you may need to send further details or payments. If you had previously sought out a tax professional to prepare your return, contacting them again with the details of an IRS letter or "correction notice" could be the best option. They will be able to supply you with the necessary forms, instructions, information and expertise to take care of the problem with minimal angst.

• If you agree, the correction will stand, as is, and unless a payment is required, you may not even need to reply.
• If you disagree, the correction that the IRS has made will need your full attention, in some form of a reply. You should draft a letter explaining why you disagree and provide any substantiating evidence in the way of documents and information you feel the IRS needs to be aware of. Put this together with the detachable bottom portion of the original notice, so the IRS can better track the issue. Before mailing the documents or information, be sure to make copies for your records. Send the complete information to the IRS address provided on the notice and allow a minimum of 30 days for a response.

You can be certain, that most of these notices and letters from the IRS will not require you to visit a local office or even contact them by telephone. However, if you have concerns or questions you can feel free to call them at the number provided on the letter. It would be a good idea to have a copy of your tax return handy, as well as the information provided in the notice or letter.

For more information about IRS notices and bills, see Pub. 594 What You Should Know about the IRS Collection Process.

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