If the Internal Revenue Service (IRS) is going to contact you, odds are high it will be in the form of a letter. The IRS may contact you for a number of reasons, but some of the more common include a tax balance that remains unpaid, a change to a refund amount, a question about a return or a change to a tax return.
If you get a letter from the IRS, do not do the following:
- Ignore the letter completely. Although a letter from the IRS is generally not a welcomed piece of mail, you cannot ignore it. The agency can apply penalties and additional interest charges if a taxpayer fails to act within a set period of time. It is also important to keep a copy of the letter. The letter will generally contain an explanation for the contact as well as additional instructions for the taxpayer.
- Go into a panic. One of the top tips the IRS gives taxpayers is to avoid panicking if they receive a letter from the agency. Set aside any emotional reaction and read through the letter to figure out what the correspondence is about. Keep in mind, the IRS sends out millions of letters to taxpayers every single year.
- Handle it on your own. It is often wise to seek legal counsel in the event the IRS requests action, either in the form of you sending the agency additional paperwork or answering certain questions. A legal professional can review the correspondence and explain what the IRS is looking for. Your legal counsel can also take the lead on ensuring you are in full compliance with applicable tax laws. If not, an attorney can review the legal tools available to help you come into compliance while mitigating the risk of additional penalties or fees.
A decision from the IRS is not final. Taxpayers can dispute a notice from the IRS. This can include an appeal of a decision by the IRS or negotiating a resolution over a tax problem. An attorney experienced in IRS tax problems can guide you through this process and better ensure your legal rights are protected.