No one is happy to receive a letter from the IRS, but it does happen. Before you panic, check out the following recommended steps to help make the process go smoothly:
1.) Make sure the letter is the real deal – IRS scams are common and before you make a payment or provide personal information to someone pretending to be the IRS, determine the letter’s authenticity. “It’s important to remember that the IRS does not call or email tax payers so if you receive something through either of those mediums, it’s a scam,” advises Conrad Levesque, CPA. “If you receive a letter, don’t automatically assume it’s genuine either.”
The IRS offers several tips (https://www.irs.gov/privacy-
2.) Once you’ve determined that the notice received is in fact from the IRS, it’s important to note any deadlines. Missing a deadline can result in additional penalties.
3.) Contact your accountant – just because the letter is genuine does not mean you necessarily owe what the notice indicates you do. The IRS can make mistakes! Before you get out your checkbook, have a professional look over the notice and the corresponding tax return/documents. It is not uncommon for a letter from your tax preparer and supporting documentation to clear up an error on the part of the IRS. If you do in fact owe, at least you will have peace of mind knowing the amount is correct.
If you see a letter from the IRS in your mailbox don’t assume you owe money. Sometimes the agency is seeking additional information such as an error in the entry of a social security number or a missing form.
4.) Arrange payments – even if it is determined that you owe money to the IRS, you don’t have to pay it in full. With the help of your tax professional you can enter into an installment agreement, allowing you to pay the balance over time, or an “offer-in-compromise” in which the IRS agrees to accept a lower amount.