How to Handle IRS Tax Notices

tax filing with Cleer

Each year the IRS sends out millions of letters to taxpayers to either provide notice of a tax credit or of taxes due. Whatever the reason for receiving one, read on for nine tips to keep your cool when responding to the IRS about a tax notice.

Tip 1: Address it and remain calm

It’s a common automatic response to panic or experience a feeling of dread when we receive a piece of mail sent to us by the IRS. Don’t let this dread cause you to ignore the letter and deal with the consequences later. Instead, by remaining aware that receiving notices is normal and requires only a simple response, you can remain calm as you review what is expected of you.

Tip 2: Ensure IRS authenticity

Before taking any action, ensure you aren’t dealing with a tax scam. Double check that the letter is authentic and is indeed from the IRS. Be aware that the IRS sends notices and letters by mail. They never contact taxpayers about their tax account or tax return by email or phone call. If you receive a letter that looks suspicious, you may call and report it directly to the IRS.

Tip 3: Know what to expect

There are variety of reasons why the IRS sends correspondence, and it will typically cover a very specific issue about your account or tax return. Notices will likely be about notification on the changes of the taxpayer’s account, taxes owed, or simply ask you to provide an additional piece of information for clarification.

Tip 4: Focus on the request

Deal only on the specific issue indicated on the letter. If you receive a notice advising you that the IRS has corrected your tax return, you should review the information and compare it with the original return.

Tip 5:Know when you don’t need to respond

If you agree with the correction to your account, then usually no reply is necessary unless a payment is required, or the notice specifically instructed you reply. You should also note the correction for your own records.

Tip #6: Dispute corrections

If you do not agree with the correction, it is important that you respond as requested. A written explanation indicating why you disagree is necessary. Send your response through mail to the address found at the bottom of the IRS notice. Include any information and documents you want the IRS to consider and allow at least 30 days for a response.

Tip #7: Understand how to respond

You should be able to resolve most notices that you receive without calling or visiting an IRS office. But if it seems a call is necessary, use the phone number indicated on the IRS notice. Be sure to have a copy of your tax return and the notice with you when you call.

Tip #8: Maintain records

It is important that you keep copies of any correspondences you receive with your other income tax records. You may need it later.

Tip #9: Respond promptly

Don’t delay or procrastinate in reading or acting on the notification. Most notices have a clear and specific set of instructions. Read the letter again if necessary to get clear on why you are being contacted, what exactly are the next steps, and the deadline for your response. Deal with it a quickly as possible so you can put it out of your mind and get back to the more enjoyable aspects of your life!

Dealing with the IRS can sometimes be unnerving, but it doesn’t have to be. Even if you are confronted with an intimidating tax issue, professionals such as tax lawyers or accountants are channels of support that can take on the heavy lifting for you.

If you need help with a IRS issue or tax notice, Cleer can help!

Author Bio
David McKeegan
David McKeegan, the founder of Cleer.Tax is both an MBA and Enrolled Agent. As an entrepreneur and small business owner himself, he really understands the pain points that company owners and founders have in regards to tax compliance and having clean financial statements. What really differentiates David is his ability to distill complicated tax matters into layman’s terms, making the advice actionable and accessible to all.
Sign up for special offers, tax reminders and the latest news!
Table of Contents

Business Tax Calendar

We’ve created this handy widget to keep track of important business tax deadlines for your startup that you can automatically add to your calendar. Get your…

hand pointing to date on calendar with pen

Start your financial journey on the right foot

Get $50 discount off your tax package.