Summer is IRS Notice Season
July 12, 2011
Have you received an IRS notice in the mail? Not what you want to see in the mailbox when you trot down to get your mail. Unfortunately your odds are high because IRS notices have increased 670% over the past 10 years ago. Last year the IRS issued 201 million notices to taxpayers. See this blog post by Cordasco and Company called IRS Notice Frenzy! Many of these IRS notices are routine letters showing that you missed reporting an item on your return such as a 1099 or interest or dividend income. These are fairly easy to resolve. A small percent are letters notifying you of an IRS audit or are a request for documentation for a specific item on your return.
Below are recommendations from the IRS on how to handle these notices:
1. Don’t panic. Many of these letters can be dealt with simply and painlessly.
2. There are a number of reasons why the IRS might send you a notice. Notices may request payment of taxes, notify you of changes to your account, or request additional information. The notice you receive normally covers a very specific issue about your account or tax return.
3. Each letter and notice offers specific instructions on what you are asked to do to satisfy the inquiry.
4. If you receive a correction notice, you should review the correspondence and compare it with the information on your return.
5. If you agree with the correction to your account, then usually no reply is necessary unless a payment is due or the notice directs otherwise.
6. If you do not agree with the correction the IRS made, it is important that you respond as requested. You should send a written explanation of why you disagree and include any documents and information you want the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the correspondence available when you call to help us respond to your inquiry.
8. It’s important that you keep copies of any correspondence with your records.
Please contact your tax professional if you receive an IRS Notice. We can see if the IRS adjustment is correct or if the item was reported on your return but was not clearly picked up by the IRS computers. It is very possible that you don’t owe the entire amount due on the IRS notice, we want to help you to pay the correct amount of tax and not too much. Happy Summer!
July 26, 2011 at 10:03am | Permalink
IRS Notice is very useful for many recommendations. It also includes pretty good view points which are very important to capture. Thanks!
July 27, 2011 at 4:24am | Permalink
Thanks Shauna, it’s important first and foremost to avoid panic when receiving such letters.
July 30, 2011 at 1:07am | Permalink
If you do not agree with the correction the IRS made, it is important that you respond as requested. You should send a written explanation of why you disagree and include any documents and information you want the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
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July 31, 2011 at 11:57pm | Permalink
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August 3, 2011 at 9:42pm | Permalink
You can ensure you are making the correct withholding every month by referring to IRS Publication 919, “How do I adjust my tax withholding?” or using the Withholding Calculator at the IRS website, http://www.irs.gov. If you are a salaried worker and wish to make changes to your withholding, you should fill up and submit a new Form W-4, Employee’s Withholding Allowance Certificate, to their employer. Likewise, if you are self-employed, you can use Form 1040-ES worksheet to correct your withholding payment.
August 5, 2011 at 4:26am | Permalink
The IRS does NOT send email correspondence and advises that you do not open any attachments or respond.
August 11, 2011 at 3:00am | Permalink
You can ensure you are making the correct with holdings every month by referring to IRS Publication 919, “How do I adjust my tax withholding?” or using the Withholding Calculator at the IRS website, http://www.irs.gov. If you are a salaried worker and wish to make changes to your withholding, you should fill up and submit a new Form W-4, Employee’s Withholding Allowance Certificate, to their employer. Likewise, if you are self-employed, you can use Form 1040-ES worksheet to correct your withholding payment.
August 28, 2011 at 9:00pm | Permalink
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September 8, 2011 at 8:59pm | Permalink
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
September 13, 2011 at 9:59pm | Permalink
IRS notifications are always threatening…Your post really helped me Shauna.Thanks
September 15, 2011 at 10:29pm | Permalink
IRS Notification is like a spark which when fall on us we burn out.
October 14, 2011 at 10:42pm | Permalink
Award winging title!!! When I first read this title “Summer is IRS Notice Season” I didn’t understand whatever you said but when I read the full reading I realize how can you express the impression. Really impressive post. Thanks!
October 31, 2011 at 1:32am | Permalink
IRS are frightening…thanks for your help.
November 6, 2011 at 9:16pm | Permalink
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November 20, 2011 at 8:15am | Permalink
All IRS correspondence includes specific instructions on what you must do to satisfy the inquiry. You should never ignore an IRS notice. If you agree with a proposed correction, then usually no further action is required unless a payment is due or the notice requests additional action. Read the notice carefully and follow the instructions provided. If you have questions, call the IRS phone number printed on the notice or call your CPA for additional help.
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November 23, 2011 at 8:49pm | Permalink
I am new to the blog. Hope I will get new tips & ideas from this blog…!!!
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November 24, 2011 at 9:51am | Permalink
Brilliant encouragement. It’s very meaningful concept. And I agree with you guy. I noticed summer is IRS Notice Season. All the best of you. Thanks.
November 24, 2011 at 10:23am | Permalink
I am not the only one having all of the enjoyment here ! keep up the good work.
January 7, 2012 at 12:04am | Permalink
Inspirational post!! I would like to thanks you for encouraging peoples to pay tax between perfect periods. Good way to aware people and just keep it up. Thanks
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