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29 May

So You Got an IRS Notice – Now What?

IRS Notices | Spire Group, PC

If you receive an IRS notice in the mail, there is no reason to panic. You’re not alone. The IRS sends out millions of notices each year. They can be notifying you of something as simple as a math correction, or as complex as an impending audit. Before you go down the “what did I do wrong?” rabbit hole, remember these four tips.

Tip #1: Tell your accountant.

Your tax advisor is uniquely prepared to handle IRS notices. Not only are they familiar with your return, but they know who to contact, what wording to use, and what documentation to provide to ensure the issue gets rectified as quickly as possible. Even if the issue is one that you can handle on your own, let your accountant know your plans. They will want a record of the correspondence, and they will need to know if there were any adjustments that will affect your future returns.

Tip #2: Be skeptical.

More and more IRS scams are being reported each year. Phone scams are so common, in fact, that the IRS listed them on their Dirty Dozen” list of tax scams for the 2018 filing season. While scams involving notices are less common, they do pose a threat. If you receive a notice that looks questionable to you, let somebody know. Your accountant can help determine if the notice is legitimate, or the IRS can verify its authenticity if you call their report line at 1-800-829-1040. Remember that the IRS will never ask for personal and financial information from you – this includes passwords, credit card numbers, bank account numbers, and the like. If you receive suspicious correspondence over the phone, e-mail, or in paper form from a service attempting to get your personal information, report it to the IRS at phishing@irs.gov.

Tip #3: Follow the directions, and meet the deadlines.

The notice itself will tell you when and how you should reply. For example, a simple corrections notice does not typically require a response unless you disagree with the adjustment or unless a payment is required. If a response is required, take note of the deadline. The IRS often requires you to reply quickly, often in as few as 30 days. If you disagree with the correction, you must respond with a written explanation of why you disagree and include documentation supporting your conclusion. Responding timely and accurately will not only minimize your likelihood of being assessed interest and penalties, but it will preserve the rights you have to appeal the case in court. Keep a copy of all correspondence, and be sure to send your responses via certified mail.

Tip #4: Know your rights.

In 2014, the IRS released a document known as the Taxpayer Bill of Rights. After consulting with the Taxpayer Advocate Service, the IRS realized that many taxpayers were ignorant of their rights, so they decided to compile a list of rights that taxpayers have when dealing with the IRS. This document includes rights such as The Right to Be Informed, The Right to Challenge the IRS’s Position, and The Right to Privacy. You’ll also learn that you have the right to appeal an IRS decision in an independent forum, if you so choose, and once a matter is settled, you can be certain that the issue is finalized. Be aware and take advantage of these privileges; never think that you are stuck in a situation that it out of your control.

These four tips can help you handle any IRS notice that comes your way. If you have any questions about a notice, or if you would like to talk to a Spire Group professional about another tax issue you’re dealing with, don’t hesitate to contact us.

About the Author

Spire Group Tax Committee Spire Group Tax Committee
The Tax Committee is comprised of a group of tax professionals that oversee tax procedures, guidelines and best practices at Spire Group, PC. They are continuously reviewing new tax laws, legislation, and tax planning strategies.

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