Posted by Income Taxes and Bookkeeping LLC

What To Do When You Get a Notice From The IRS

What To Do When You Get a Notice From The IRS

Getting a notice from Uncle Sam does not necessarily mean you are in trouble. When you get any notice from Uncle Sam, there are many courses of action to take. So the best plan is to calm down and read what Uncle Sam has to say. Likewise, a notice does not necessarily translate into a tax audit. 

The only thing many people want from Uncle Sam is their refund notice. Getting any other correspondence could be nerve-wracking, especially after filing your taxes and doing everything required of you as a good citizen of the United States. On getting such Notice, you can do many things.

 What is the purpose of the Notice? 

Generally, the Notice or letter sent will have the purpose, instructions alongside the guidelines for responding to it. Usually, there will be a specific issue on your return that such IRS notice will address. For example, it might be to inform you of an extra tax that you owe, that you should expect a bigger tax refund compared to what you reported initially. It might also be to ask for more information on your tax return. 

You will find a notice number located on the right-hand corner, upper part, which is also imprinted on the left-hand side of the lower part – the part you can tear off inside your notice letter. In addition, there is a table on Uncle Sam's website that explains the different types of Notice based on the numbers. 

You can get more information by checking the number that corresponds to the number on your Notice. While the number might be slightly different based on the specific individual case, notices having similar numbers usually have similar purposes.


What can you do?

All taxpayers have 30 days to respond to an IRS notice, so it is pointless pretending it does not exist. Also, make sure to know the specific tax year the Notice refers to and not assume it has to do with the most recent tax return you filed. 

Ensure to check and follow the instructions as it might need more information or ask a specific question. For minor issues that you have your facts right, responding yourself should not cause a problem. There are times, however, that you need to work with tax professionals. According to Uncle Sam, many of the correspondence you will get from the IRS does not need you to contact the IRS before settling it.

For cases when you agree with the Notice of Correction

You might make a mistake on your tax return which will warrant a correction notice, or Uncle Sam might send you a notice of unreported income. With the info you have on your tax return, compare what Uncle Sam presents on its adjustment. 

If you believe Uncle Sam's adjustment is correct, the next course of action is to reply with a money order or check to take care of the extra taxes you owe. You will send a check with the reference number written on it, alongside the voucher Uncle Sam provided with the Notice.


For Cases When you Disagree with Uncle Sam’s Notice 

There are cases when Uncle Sam might not be correct, so you need to explain as soon as possible with a written notice. The Notice will state your reason for not agreeing with Uncle Sam's adjustment alongside copies of relevant and supporting documents. 

The document needs to be mailed to the address specified on the top of the envelope. Make sure to have a place to keep the IRS’s correspondence (including your response to Uncle Sam) for record purposes.


In dealing with correspondence from the IRS, do not panic. The most vital thing is your response, as ignoring them will not make Uncle Sam forget, and it will also complicate things down the line. 




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