Updated: Feb 1
Last week, I discussed how messed up the IRS is right now. To follow up on that, what should you do if you receive any correspondence from the IRS.
There are all kinds of reasons that the IRS might contact you (always via US Mail by the way). Maybe they are telling you about changes they made to a return you filed, or maybe you still owe them for a return filed in the past, or maybe you are entitled to advanced child tax credits, etc.
RULE #1 – Do NOT panic. Letters received in the US Mail is the only way you will ever hear unexpectedly from the IRS. Just read the letter carefully and take the appropriate action. Seek professional help if you are confused.
RULE #2 – Do NOT ignore it. There are almost always instructions on what you must do. Follow those instructions. If you are unsure, seek out a tax professional for help ASAP!
RULE #3 – Do NOT throw it away, even if resolved. Keep EVERY IRS letter in a file for at least 7 years.
RULE #4 – Take TIMELY Action. A notice may reference changes to your account, taxes owed, a payment request or a specific issue on a tax return. Acting timely could minimize additional interest and penalty charges.
RULE #5 – Make sure you agree with the IRS. We’ve found their notices are wrong about 50% of the time. Just because the IRS sent it, doesn’t make it right. Review the notice, check it against your own information. Once again, seek out a tax professional (like a CPA or Enrolled Agent, not the bottom level preparers who hire inexperienced folks to just do simple data entry, many times not really understanding what they are doing).
RULE #6 – If you can call the IRS to resolve a question, etc. it is worth the time you will be on hold. Don’t call the IRS near the end of the day, since you may get hung up on when the IRS hits closing time. AVOID sending responses via US Mail since the IRS may not open that mail for up to 6 months or longer.
RULE #7 – REMEMBER that the IRS NEVER initiates an issue by phone, email, fax, etc. ALWAYS by US Mail. So if you unexpectedly receive anything purporting to be from the IRS other than from US Mail, it is most likely a scam. Do NOT respond to it. If you are unsure, contact a tax professional to help you.
Have you heard? Job 3:25 says, “For the thing that I fear comes upon me, and what I dread befalls me.”
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com Also on Facebook.