Dear Client and Friends:

How to Manage IRS Mail

I recently had a situation with a young client in his mid-twenties who got a notice from the IRS. It was official and it asked him to sign the notice and return it to the IRS. So, he did.

That was not a good decision.

If you do get mail from the IRS – here’s what you do

The first and most important “rule of thumb” is do not sign any IRS documents without my ok in advance!  Attaching a signature to an IRS document can, unwittingly, give the IRS immense power (much more power than they would otherwise have) over your tax life to your detriment.  Some of these errors can be unrecoverable.

The IRS mails millions of letters to taxpayers every year for a variety of reasons; a large portion of these letters from the IRS are IRS errors – not your errors. Keep the following suggestions in mind on how to best handle a letter or notice from the IRS:

1. Do not panic. Send a copy of the letter to me! Simply responding will take care of most IRS letters and notices. And, as always, we are here to help if you need us.
2. Do not ignore the letter. Most IRS notices are about federal tax returns or tax accounts. Each notice deals with a specific issue and includes specific instructions on what to do. Read the letter carefully; some notices or letters require a response by a specific date.
3. Respond timely. Notices are often about changes to your account, taxes owed, or a payment request. Sometimes a notice may ask for more information about a specific issue or item on a tax return. A timely response could minimize additional interest and penalty charges.
4. Matching Letters. If a notice indicates a changed or corrected tax return, it’s important to review the information and compare it with your original return. These are called “Matching Letters”. Generally speaking, you need to let our CPA Firm respond to all Matching Letters.
   1. If you agree with the changes, simply note the corrections on your copy of your tax return in your records. There is usually no need to reply to a notice unless specifically instructed to do so, or to make a payment.
   2. If you don’t agree with the changes, you’ll need to respond by mailing a letter explaining why you disagree to the address on the contact stub at the bottom of the notice. Be sure to include information and documents for the IRS to consider and allow at least 30 days for a response.
5. Phone Calls. There is no need to call the IRS or make an appointment at a taxpayer assistance center for most notices. If a call seems necessary, use the phone number in the upper right-hand corner of the notice. Be sure to have a copy of the related tax return and notice when calling.
6. Always keep copies of any notices received with tax records. As soon as you can, send us copies of all notices that you receive.
7. Tax Collectors! The IRS and its authorized private collection agency will send letters and notices by mail. The IRS will not demand payment a certain way, such as prepaid debit or credit card. To make a payment, visit gov/payments or use the IRS2Go app to make a payment with Direct Pay for free, or by debit or credit card through an approved payment processor for a fee.

Fraudulent Tax Contacts.  Finally, it’s important to understand that the IRS will never initiate contact using social media, email or text message. First, contact generally comes in the mail. If you don’t know if you owe money to the IRS, you can find out by checking your tax account information at IRS.gov (search for “view your account”).

Unexpected phone calls from the IRS, often saying that they are going to issue an arrest warrant or sue you unless you … do whatever are always fraudulent! Always!

What do you do when you get an unexpected phone call from the IRS: Hang Up!

Any Questions?  Do not hesitate to ask me.

Steve Richardson, CPA