The IRS sends out tens of thousands of notices annually to individual and business taxpayers. The reasons for these vary, but can include requests for additional information, payment reminders, audit or investigation notices, refund checks and more.
Most of these are fairly basic and straightforward. A simple response, an additional receipt or W-2, a signature inadvertently left off a form could all possibly resolve the entire matter. Sometimes, additional steps are required, but not always.
The IRS recently released guidelines, in the form of Tax Tip 2017-78 for taxpayers who've been contacted by the agency.
- First and foremost, they advise against panicking. Worrying about it is counterproductive in most cases, because it is a simple fix. Taxpayers should read any correspondence carefully to determine how to proceed.
- Whatever you do, don't ignore a letter from the IRS. This is definitely not an instance where ignoring the problem will make it go away.
- Take the time to compare any reference to a corrected or amended tax return or vital information. If you didn't submit the changes yourself, this could indicate identity theft
- Reply if necessary or requested. Sometimes, a notice is just that: to put you on notice about a change in your tax status or alert you to potential upcoming IRS action (like an audit or investigation, or a delay in your refund for an administrative reason).
- Pay timely attention. Whenever correspondence from the IRS includes information with which you do not agree or that may be incorrect, you should alert them in a timely fashion. Official IRS notices will always include contact information, both via phone and via mail. Send a reply, and wait at least 30 days for a response before reaching out again (if necessary). Keep in mind that if the notice is a payment request, you may incur penalties or interest unless your payment is received by the due date. You may also jeopardize your right to challenge or contest tax liability if you don't timely respond.
- Don't throw away correspondence from the IRS until you are sure the matter is fully resolved. Maintain notices and letters the same period of time you would a tax return document.
Some tax notices from the IRS are innocuous. Others, however, could indicate huge problems. If you are concerned about the content of an IRS notice, and worried about the prospect of facing the agency on your own, enlist the assistance of an experienced tax attorney.