Got a Letter from the IRS? What You Should (and Shouldn’t) Do!

Posted on Thu, Jul 26, 2018 ©2021 Drucker & Scaccetti

D&S Marketing_023By:  Drucker & Scaccetti


Don’t play with fire. Do brush your teeth twice a day. Don’t chew with your mouth open. Do say “please” and “thank you.”  These are some of the basic “Dos and Don’ts” engrained into our memory by our parents. As adults, learning is a trial-and-error exercise.  For example, what are the Dos and Don’ts when you’ve received a letter from the IRS? Before you make a mental list of your answers, read on for some tips on how to proceed.


Every year the IRS mails millions of letters to taxpayers for many reasons. Upon receiving a letter some may be compelled to respond without consulting a tax advisor, and some may even choose to ignore it. In most cases both are usually not recommended. Some letters are serious business, and some are merely informational.  But, one thing is for sure: all should be read and addressed as mail is the only way the IRS will initially contact you.


Here are some tips and suggestions if you receive one:


Don’t ignore it. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. If you are not sure about it’s contents once read, call your tax or legal advisors immediately.


Don’t panic. The IRS and its authorized private collection agencies do send letters by mail. Most of the time all you need to do is read the letter carefully and take the appropriate action. Again, if you are not sure about the necessary action, talk to your tax advisor.


Do take timely action. A notice may reference changes to a taxpayer’s account, taxes owed, a payment request or a specific issue on a tax return. Taking timely action could minimize additional interest and penalty charges. Contact your tax advisor as soon as you receive the letter since in most cases you have 30 days to respond.


Do review the information. If a letter is about a changed or corrected tax return, you should review the information and compare it with your original return with your tax advisor. If you agree, you should make notes about the corrections on your personal copy of the tax return, affix the IRS letter, and keep it for your records.  If payment is due, send it by the due date.


Don’t reply unless instructed to do so. A letter from the IRS can cause instant stress and compel you to call or reply for more information. There is usually no need for you to reply to a notice unless specifically instructed to do so or if you disagree with proposed changes. On the other hand, if you owe the IRS a strategic approach may be in order.  We cannot say it enough, call your tax advisor and work out a plan.


Do respond to a disputed notice. If you do not agree with the IRS, you or your tax advisor should mail a letter explaining why you dispute the notice. You should mail it to the address on the contact stub at the bottom of the notice. You should include information and documents for the IRS to review when considering the dispute. You should allow at least 30 days for the IRS to respond.  Keep in mind it may take 60-90+ days for resolution of the matter.


Do remember that there is usually no need to call the IRS. If you must contact the IRS by phone, you should use the number in the upper right-hand corner of the notice. You should have a copy of the tax return and letter when calling. Because some notices from the IRS may be confusing, it is recommended to have your tax advisor contact the IRS on your behalf. To do so, your advisor will need to be an authorized representative which usually means you’ll need to sign Form 2848 Power of Attorney. The IRS is a collection agency, and anything you say can be used to further those collection pursuits, so be mindful when you call.


Do avoid scams. The IRS will never initiate contact using social media or text message. The first contact from the IRS should come in the mail. If you are unsure if you owe money to the IRS, you should contact your tax advisor who can go over your records with you. Don’t respond to any emails or phone calls with personal information as it is likely not the IRS contacting you.


The recurring theme throughout these tips is to keep your tax advisor informed.  Often, the way the IRS is approached can make a significant difference in how your account is handled.  For example, did you know practitioners have a special line they can call for assistance with their client’s accounts?  Only practitioners can call this line and usually they are able to get through faster and receive prompt assistance in resolving client matters.


If you find yourself the recipient of a letter from the IRS and you don’t have a tax advisor, contact The Tax Warriors® at Drucker & Scaccetti. We are always prepared to help you with your tax situation.

Topics: power of attorney, IRS Notice, IRS letter, Form 2848

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