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10 tips to help you deal with an IRS tax notice

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The bulk of tax season wrapped up on April 15. Many taxpayers will be getting the refunds those filings showed.

But some individuals will get a less welcome letter from the Internal Revenue Service.

The IRS sends notices and letters when it needs has ask a question about a taxpayer’s federal tax return. The correspondence also could be to let filers know about a change the agency made to their account. Or it could be notification that the taxpayers owes Uncle Sam and needs to make a payment.

Regardless of the reason for the IRS mail, there are some general ways you should react and respond. Here are 10 tips offered by the IRS and tax professionals to help you deal efficiently and effectively with any IRS notice or letter.

1. Don't panic. You are not alone. The IRS mails millions of notices and letters to taxpayers each year. Technically, a notice is a correspondence audit, but getting this special IRS mail doesn’t mean you’re about to be the focus of a full-blown audit. Sometimes the agency just wants more information from the filer. Other times, it has found what it believes is a mistake on your return. The mailing is simply a way of trying to clear up any questions quickly and as painlessly as possible for both the IRS and taxpayers.

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. Taking prompt action, such as finding a way to pay a surprisingly large tax bill, could minimize additional interest and penalty charges.

3. Read the letter/notice thoroughly. Most IRS letters and notices are about federal tax returns or tax accounts. Each notice deals with a specific issue, and includes any steps the taxpayer needs to take. Read it carefully, so you’ll know exactly what the IRS expects or wants from you. The agency could simply want you to provide more information about an entry. Or it could explain changes the IRS made to your filing, and how the revisions affect any tax due or refund you were expecting.

4. Double check the IRS’ and your 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. Chances are that you made an innocent filing error. But the IRS does sometimes make mistakes, so you also want to catch those as quickly as possible. Then let the IRS know what your review found.

5. Don’t do anything if you agree. 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. You should, however, make notes about the IRS changes on your personal copy of your tax return and keep it in your records.

6. Speak up if you disagree. 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.

7. Ask questions if you’re uncertain or confused. 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 that’s being questioned, as well as the notice with you when you call.

8. Keep good records. Complete tax records, both of your official forms and substantiating material, is the best way to answer any IRS follow-up questions about your returns. The info should help you show the federal tax collector why you entered what you did, and resolve the notice issue. Record keeping also is important when it comes to IRS notices, and any adjustments they show that IRS has made to a taxpayer's account. Make sure you keep copies of any notices and all follow-up communications and documents, including the annotated correct return noted in tip #5.

9. Know the notices. The IRS is continuing efforts to make its tax notices more intelligible. But even when they’re more understandable, a notice still can be confusing. You can familiarize yourself with the many types of notices that the IRS sends. If you set up an IRS Online Account, you also can view digital copies of select IRS notices. And if you want more information about the specific communication you got, you can call the phone number listed on the notice.

10. Be alert for scams. By now, most of us are a bit skeptical about any kind of outreach from the IRS. We know that tax scammers often impersonate the IRS. This mostly is done via phone, text, or email, but some crooks have created and sent out fake IRS paper communiques, too. If you suspect that you have received a fraudulent tax notice, check you online tax account or call 1-800-829-1040 or visit your local IRS office to determine if it’s real. And if you get a call or e-mail after receiving an official IRS notice, don't be conned into believing it's a real follow-up to your legitimate interaction with the IRS.

There, that wasn’t too bad. Again, the main thing if you get a notice is to not freak out. Just deal with it.

The faster you do that, the less added time you have to spend with the IRS.

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