IRS Letter – Greetings from the IRS
You’ve just picked up your mail and … uh oh, there among the ads, bills and too numerous offerings for credit cards is that official looking IRS letter. A feeling of dread comes over you…but don’t panic or toss it, and please DO open it. It might even be good news. Usually, an IRS letter is a notification that they need verification of documents or substantiation of an amount you have claimed on your tax return. Read the letter thoroughly. Determine what they are looking for, and then provide the information. Some of the most commonly missed items on a return are simple things: you forgot to sign the 1040; you didn’t attach W-2’s and required statements; if you’re paying quarterly, maybe you claimed the wrong amount as estimated tax; or, perhaps the income you listed doesn’t match the figure that was reported to the IRS on a Form 1099 by someone who paid you during the tax year.If you have the correct information, it’s a simple matter to fix. Make copies of your documents verifying the information on your return and send the copies back to the IRS along with a copy of the letter they sent to you. If, in fact, you didn’t include an amount on your return that should have been there, sign the form agreeing to the change and send them a check for the amount of tax due by the deadline date given for compliance. Usually, penalties and interest will be added—so, the sooner you comply, the less it will cost.If your IRS letter advises you that your return has been selected for audit, you would be wise to seek professional advice. If you used a tax professional to prepare your return, such as an enrolled agent (EA), CPA, attorney or registered tax return preparer, you should contact that person for help with the audit. If you prepared your own return, you may wish to contact the enrolled agents at Tax Samaritan immediately to help you properly respond to the IRS letter. Enrolled agents are authorized by the U.S. Treasury Department to represent taxpayers before all administrative levels of the IRS for audits, collections, and appeals..Now you’re thinking, what about that possible good news mentioned earlier? It could be that the IRS letter is for an unexpected refund, of course. Now, open that letter!Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics. Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs. Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on U.S. taxation.