IRS, personal finances — August 27, 2012

Getting a Notice from the IRS

by Bob Williams

dealing with an IRS noticeIt's a Saturday morning like any other; the birds are singing, the sun is up and you've got a fresh cup of Joe to start your day. You throw on some sweats, slide into your fuzzy bunny slippers, and venture out to check the mail. There, in with the usual "You May Already Be a Winner" envelopes, you see a simple white mailing marked simply, "Internal Revenue Service." (Cue the Ominous Music.)


In a split second, your head fills with images of being dragged off to a dingy jail cell, of breaking rocks with a sledge hammer to repay a massive debt and your family moving away so they don't have to live with a tax cheat.

CALM DOWN!! Take a deep breath -- and another cup of coffee won't hurt, either.

The IRS sends out millions of letters every year, for a variety of reasons, so it's WAY too early to freak out (unless, of course, you notice the SWAT team has taken up positions around your house …).

If you are one of the "lucky" recipients, here are some things you should know to avoid further sleepless nights.

First and foremost: Don't panic. Even the IRS says most of their notices can be dealt with very simply. There are a number of reasons the IRS sends out a notice in the first place. It might request payment of taxes, but it could just notify you of a change in your account, or ask for additional information. Whatever the notice, it will normally cover a very specific issue about your IRS account or your return.

Just Follow Directions

The good news is that every notice contains instructions on what you need to do to solve the issue.

If the notice is about a correction to your tax return, look over the letter carefully, then compare it to the tax return that you filed. If you agree with the correction to your account, most times, no reply is necessary -- unless, of course, there's a payment due.

If you don't agree with the IRS's correction, you'll need to respond as requested in the notice. You should respond in writing to the IRS, explaining why you disagree (email won't work for this), and include any documents or any other information you think the IRS should consider in understanding your position. Remember to include the bottom tear-off portion of the notice when you reply.

Mail everything to the IRS, using the address in the lower left corner of the notice. And understand it'll take at least 30 days for the IRS to get back to you.

That being said, a lot of these notices can be handled without even visiting or calling an IRS field office. But if you do have questions, the phone number to call is right there on the IRS notice itself. It'll be on the upper right corner of the mailing. You'll need a copy of your tax return and the notice available when you call.

And always, always keep a copy of your notice -- and your reply -- with your tax records.

For more information about IRS notices and bills, see Publication 594, The IRS Collection Process. Questions about penalties and interest charges? Check out Publication 17, Your Federal Income Tax for Individuals. For those who are more visually oriented, take a look at the YouTube video, "Received a Letter from the IRS?"

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