Have you received a letter from the IRS? If so, you’ll want to take the appropriate steps to resolve the issue(s) identified in the letter.
IRS letters often request specific action on your part. Ignoring these letters could lead to more severe penalties down the line and only prolong the issue you currently face.
Read on to learn the steps you should take when you receive an IRS letter, then contact our team at Levy and Associates for assistance.
1. Don’t Panic
Receiving a letter from the IRS can be stressful, and you may initially fear expensive IRS penalties that you may not be able to afford.
However, IRS letters are not always so severe. Often, these letters state actions you can take to avoid facing penalties. Once you review the information in the letter and take the appropriate steps, you can resolve the issue and know what to avoid during future tax seasons.
2. Read the Letter and Determine the Issue
IRS letters are typically cut and dry. They don’t waste any words telling you their purpose and what you need to do.
After receiving an IRS letter, your first step should be to read it thoroughly and determine the issue that prompted the letter. Most IRS letters contain notices about your federal tax accounts or tax returns. For example, the IRS may need you to:
- Provide additional information for your taxes
- Send additional payment with your tax returns
Other times, the IRS may send you a letter to inform you about something, such as a change to your tax account or a decrease in your tax refund. In these cases, you may not need to resolve any issues.
Reading the letter thoroughly can help you understand its purpose and what to do next.
3. Determine Whether You Need to Reply
Some IRS letters do not warrant a response on the recipient’s part. Typically, the only time you should respond to an IRS letter is when the letter explicitly asks you to do so.
However, if you disagree with the information in the letter — such as a change to your account information — you can send a response detailing your disagreement.
If the letter wants you to act in some way, it will lay out the steps you need to take. However, if the letter is a notice of a change to your account, you may not need to respond.
4. Take Timely Action
If your IRS letter warrants a response or another action, you’ll want to act quickly. Your letter may state a deadline by which you must send your response to minimize additional interest or penalties. However, even if it doesn’t note a deadline, responding quickly can help you resolve the matter and avoid further action.
5. Contact the IRS to Ask Any Questions
If you are confused or have any questions about the information in the IRS letter, you can call the IRS directly. Your letter should include a phone number to call in the top right corner.
Before you call this number, be sure to have a copy of your tax return and the letter in front of you.
6. Tell Your Accountant
Finally, we recommend sending your tax accountant a copy of the IRS letter. Your accountant can file the letter with your other tax documentation and make the necessary changes to your tax returns. They can also reference the letter during subsequent tax seasons and help you avoid similar letters in the future.
If you’re still unsure what to do with your IRS letter, we can help. Contact our Levy and Associates tax team today at 1-800-TAX-LEVY to request assistance.