As administrative costs increase and personnel count within the IRS substantially decreases, it is likely that any issues identified within a particular taxpayer’s income tax returns will first be disclosed through a formal Notice sent through the mail. Such an approach is standard operating procedure within the Agency and should not be viewed as unusual by taxpayers receiving a Notice. Each year, the IRS mails millions of letters and notices to taxpayers within the United States and around the world.
In a recent Tax Tip (2015-05), the Service offers advice for taxpayers receiving a notice:
- Don’t Ignore The Notice or Letter. You can respond to most Internal Revenue Service notices and letters quickly and easily. It is important that you reply right away.
Note that our firm has often worked with individuals who simply disregarded the correspondence from the Service. With this approach, both the cost and the degree of difficulty to resolve the matter increase exponentially. Nothing is worse than simply disregarding the communication.
- Focus on the Issue. IRS notices usually deal with a specific issue about your tax return or tax account. Understanding the reason that the Notice or letter was sent is critically important to understanding how best to address the matter.
For more information go to Understanding Your IRS Notice or Letter on the IRS website
- Follow Instructions. Read the notice carefully. It will tell you if you need to take any action to resolve the matter. You should absolutely follow the instructions.
- Read a Correction Notice Carefully. If the letter received says that the IRS corrected your tax return, you should carefully review the information provided and compare it to your tax return.
If you agree with the correction, you do not need to reply unless a payment is due.
If you do not agree with the correction, it’s important that you respond to the IRS. In this instance, draft a letter that explains why you do not agree. Make sure to include information and any documents you may wish the IRS to consider. Include the bottom “tear-off” portion of the Notice with your letter. Mail your reply to the IRS at the address shown in the lower left part of the notice. Allow at least 30 days for a response from the IRS.
- No Need to Visit the IRS Office. Taxpayers can handle most Notices without calling or visiting the IRS. If you have questions, call the phone number in the upper right corner of the notice. You should have a copy of your tax return and the Notice with you when you call.
- Keep the Notice. Keep a copy of the Notice you get from the IRS with your tax records.
- Watch Out for Scams. Do not fall for phone and phishing email scams that use the IRS as a lure. As noted above, the Service first contacts people about unpaid taxes and tax matters by mail – not by telephone. The Agency does not initiate contact with taxpayers by email, text or social media.
- The Right to Retain Representation. The Taxpayer Bill of Rights (TBOR), takes many of your rights in our tax laws and groups them into 10 broad categories. For instance, you have the right to retain an authorized representative to represent you in your communications with the IRS. You also have the right to seek assistance from a Low Income Taxpayer Clinic if you cannot afford representation. For more information, visit gov and type “TBOR” in the search box.
Grossman Yanak & Ford LLP has handled hundreds of these Notices on behalf of our clients. The key element leading to successful resolution is patience. The wheels of government can turn very slowly and, oftentimes, matters that should require a small investment of time and resources can take months to fully resolve.
If you have a tax matter with any tax authority, including the Internal Revenue Service, and you would like some insight or assistance, please contact Bob Grossman or Don Johnston at 412.338.9300.
