What to Do If You Get an IRS Letter
Tax season is over, and you’ve filed your return. Now you can sit back and relax, right? Well, not always. Sometimes, even after filing, the IRS might send you a letter or notice. Don’t panic! Getting mail from the IRS doesn’t automatically mean there’s a big problem. Here’s a simple guide on how to handle it.
Why Did I Get a Letter?
The IRS sends letters for various reasons:
- Verification: They might need more information about your tax return.
- Changes: They may have made adjustments to your return.
- Payment: There could be a balance due or a refund waiting for you.
- Identity Confirmation: They might need to verify your identity to protect against fraud.
Steps to Take When You Get an IRS Letter
- Understand the Purpose: The letter will explain why the IRS is contacting you. It could be a simple clarification or a more detailed issue.
- Check the Deadline: Note any deadlines for your response to avoid penalties or additional issues.
- Match Details: Look at your tax return and compare the information with what’s in the letter. This will help you understand any discrepancies.
- Provide Information: If the IRS requests more information or documentation, gather what you need and send it promptly.
- Use Contact Information: The letter will include a specific address or phone number for your response. Make sure you use this when replying.
- Meet Deadlines: Responding within the specified time frame is crucial. It shows you’re cooperating and helps resolve the issue faster.
- Keep Copies: Make copies of any documents you send to the IRS for your records.
- Don’t Ignore It. Ignoring IRS correspondence can lead to more serious issues, including penalties and interest. Addressing the matter head-on is always the best approach.
Common Scenarios and How to Handle Them
Request for Additional Information
Example: The IRS needs more details about a specific deduction or credit you claimed.
Action: Provide the requested documents (like receipts or bank statements) to support your claim.
Changes to Your Return
Example: The IRS made corrections to your math or found a discrepancy.
Action: Review the changes. If you agree, you don’t need to do anything. If you disagree, follow the instructions to contest it.
Balance Due
Example: You owe additional taxes.
Action: Pay the amount due by the deadline to avoid extra fees. If you can’t pay in full, consider setting up a payment plan.
Refund Adjustment
Example: The IRS adjusted your refund amount.
Action: Check the new amount against your calculations. If you agree, no action is needed. If not, contact the IRS to clarify.
Final Tips
Stay Organized: Keep all tax-related documents and correspondence organized.
Stay Calm: IRS letters are often routine and can be resolved with timely responses.
Stay Informed: Knowing your rights and responsibilities can help you handle IRS correspondence confidently.
By following these steps, you can effectively manage any post-tax season IRS correspondence and maintain peace of mind.
Sometimes, dealing with the IRS can be complicated, and it might be beneficial to get our help such as:
Complex Issues: If the letter involves complex tax issues or large amounts of money.
Disputes: If you disagree with the IRS and need to contest their findings.
Understanding: If you’re unsure about what the letter means or how to respond Penrose & Associates can help you navigate the process, ensure your response is accurate, and potentially save you from costly mistakes.