You filed your tax return. Now the Internal Revenue Service has questions about your Form 1040.
While hearing from the tax collector about your return is always a little unnerving, it doesn't necessarily have to be a big deal. A notice does not mean you are under audit. Neither does it mean that your return was incorrectly filed.
And in many cases, any issues the IRS has with your 1040 can be quickly resolved.
Here are 10 tips to help you deal efficiently and effectively with an IRS notice or letter.
1. Don't panic.
You are not alone. The IRS mails millions of notices and letters to taxpayers each year. Sometimes the agency just wants more information from the filer. Other times, it has found what it believes is a mistake on your return.
2. Don't ignore the IRS.
If the IRS says you didn't pay enough tax, penalties and interest on the due amount will add to any tax liability. If you ignore the matter, that amount will keep growing. Notices also often have deadlines for responding. Miss them and you'll find yourself facing more tax troubles.
3. Read the letter/notice thoroughly.
Each notice has specific instructions, so read it carefully. It will tell you what you need to do, such as provide more information. Or it could explain changes the IRS made to your filing and how that affects any tax due or refund you were expecting.
4. Know the notices.
The IRS has done a great job over the years in making notices more understandable. But if you're still a bit confused as to why you got a notice or what the IRS wants, you can familiarize yourself with the many types of notices that the IRS sends.
5. Double check the numbers.
When a notice includes changes by the IRS to your tax account, review the information and compare it with your original return. Nobody's perfect. The IRS does sometimes make mistakes so you want to catch them as quickly as possible.
6. If you agree, you're done.
In instances where you agree that the IRS notice information is correct, you usually don't need to do anything else. There's no need to reply unless the IRS document gives you other instructions or you need to make a payment.
7. If you disagree, speak up.
If, however, you don't agree with the notice, it's important for you to respond. Write a letter to the IRS explaining why you think the agency is wrong. Include any information and documents you want the IRS to consider. Mail your reply with the bottom tear-off portion of the notice to the address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.
8. Know when you need to get personal.
You generally won't need to call the IRS or visit an IRS office to take care of a notice. But if you do have questions, you can call the phone number in the upper right-hand corner of the notice. Have a copy of your tax return and the notice with you when you call.
9. Keep good records.
Keeping good records, both of your official forms and substantiating material, is a solid piece of advice even if you never hear from the IRS. But when it comes to IRS notices, you'll also want to make sure you keep copies of any notices and all follow-up communications and documents.
10. Be alert for scams.
Most tax scammers tend to show up online or as phone callers, while the IRS likes to communicate with taxpayers by letters and notices sent via snail mail. Sometimes, though, crooks take the paper route. Call 1-800-829-1040 or visit a local IRS office if you suspect that you have received a fraudulent tax notice. And if you get a call or e-mail after receiving an official IRS notice, don't be conned into believing it's a follow-up to your legitimate interaction with the IRS.
Again, if you get a notice, don't freak out. Just deal with it.
The more quickly and thoroughly you do that, the less additional time you have to spend with the IRS.
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