IRS Notices

Correspondence from tax agencies are on the rise. What should you do if you receive a letter or a notice from the IRS or a state tax agency? First of all, don't panic, but don't ignore it. Many of these issues are relatively easily resolved. Don't assume the notice, including any balance due, is correct. If you prepared your own return, carefully review the notice against your records to ensure that you understand what the agency is changing or what they are requesting of you. If you do not understand, it is best to contact a CPA to help you solve the issue. It can save you thousands of dollars. If you used a tax preparer, provide them a copy of the notice as soon as possible (we do not automatically receive copies of these and have no way of knowing that there's an issue unless you give them to us). Ask your preparer if they included the cost of responding to letters in your tax prep fee. If not, ask them to estimate the cost of their assistance with the notice. Lastly, be patient. The IRS and other agencies are taking 6 to 9 months recently to respond to correspondence. You may even receive additional correspondence in the meantime. Follow up if you haven't heard anything in about 9 months.