Have you received a letter from the Internal Revenue Service (IRS)? It doesn’t exactly create a warm, fuzzy feeling. In fact, IRS letters often conjures up feelings of dread and fear. The first action to take when receiving such a letter is to remain calm and read the correspondence carefully. Take note of the date provided for you to respond. Ignoring an IRS letter can exacerbate the situation. Furthermore, always pick up IRS certified letters from the post office. Keep in mind that the IRS will never initiate correspondence with you via e-mail. Beware of phishing to extract personal information under the disguise of collecting information “from the IRS.”
Letters from the IRS generally fall into the following categories
Request for additional information
Refund or balance due
Notification of an adjustments on your return (underreported income, incorrect calculations)
Address Change Confirmation
Certified Letter (Most common are notice of demand for payment, tax lien, or intent to levy)
In my experience, approximately 90% of correspondence received can be handled with a simple reply. IRS certified letters are serious and typically is an indication the IRS is about to take some legal action against you. You will likely have 30 days to respond to this notice before the IRS initiates enforcement; an even more important reason to open IRS letters promptly. If you have a tax professional, notify them promptly before responding. Tax professionals are familiar with IRS notices and the most efficient action needed. Most importantly, do not always assume the IRS notice is correct.
Also, notify the IRS promptly of address changes-you want to be apprised of IRS actions against you. The IRS will send notices to the last address on record.
So take a deep breath, open your IRS letter, read it carefully, determine what action the IRS needs you to take, and the deadline to respond. You will feel so empowered when you take action!