What to Do When the IRS Contacts You: A Simple Guide
Receiving an IRS notice in the mail can be surprising and sometimes overwhelming, but it’s important to handle it calmly and methodically. Here’s an easy-to-follow, step-by-step guide to dealing with an IRS notice.
Step 1: Open and Read the Notice The first thing you should do when you get an IRS notice is to actually open and read it. Ignoring it won't help, and the sooner you know what it’s about, the better you can respond. These notices can come for various reasons, not all of which are negative. Sometimes, the IRS just needs to confirm something on your tax return or inform you about changes to your account.
Step 2: Understand the Contents and Deadlines After reading the notice, make sure you understand what it is asking or telling you. Most IRS notices will clearly state why they were sent, what information they concern, and if there’s anything specific they need from you. Importantly, there will be a deadline by which you need to respond or take action. Make sure you note this deadline and prioritize responding on time to avoid potential penalties or additional interest on owed amounts.
Step 3: Verify the Notice Before you respond, it’s wise to verify the validity of the notice. Check that the letter is actually from the IRS. The notice should provide contact information and a notice or letter number. You can use this information to verify its authenticity by contacting the IRS directly through their official number or checking online through the IRS website.
Step 4: Consult a Professional If you’re unsure about any part of the notice or how to respond, it’s a good idea to talk to a trusted tax professional. A tax accountant or a tax attorney can help you understand the notice in detail. They can confirm the accuracy of what the IRS is claiming and advise you on the best course of action, whether it’s correcting a mistake on your return, paying a balance, or providing additional documentation.
Step 5: Respond Appropriately Once you’re clear on what needs to be done, respond to the IRS notice. If you need to correct information, submit the required documentation, or make a payment, ensure that you do this within the set timeframe. When you send your response, keep copies of any documents you provide, and use certified mail so that you have proof of the date your response was sent and received.
Step 6: Keep Records and Wait After responding, keep a copy of the notice, your response, and any receipts for payments made. It often takes the IRS a while to process responses, so don’t expect an immediate reply. They generally ask for at least 30 days to get back to you. During this waiting period, keep any new documents or related information in a safe place.
Understanding Common IRS Notices
CP2000: Issued when income reported from third-party sources does not match the income reported on your tax return.
CP501: A reminder notice that you have a balance due on one of your tax accounts.
CP12: Notice informing you that the IRS has made corrections to your tax return.
Possible Consequences of Ignoring IRS Notices Failing to respond to an IRS notice can lead to escalated actions from the IRS, including penalties, added interest on unpaid taxes, tax liens, or even a levy on your wages or bank accounts. It’s crucial to address any notices promptly to avoid these complications.
Understanding Your IRS Notice The IRS provides resources to help you understand the specifics of any notice you receive. You can access detailed explanations and actions required for different types of notices through the IRS’s official website under the “Understanding Your IRS Notice or Letter” resource.
IRS Contact Tips
Timing: Contact the IRS during their off-peak hours, typically early morning or late afternoon, to avoid long wait times.
Preparation: Have all relevant documents, such as your tax return, the notice, and any correspondence from the IRS, handy before you call. And be ready to provide all your personal data so they can verify your identity.
Record Keeping: Always keep a record of the IRS representative’s name and their ID number, the time and date of your call, and a summary of what was discussed in case you need to reference this information later.
Dealing with the IRS need not be intimidating. Most issues can be resolved simply by providing the necessary information or making any needed corrections. The key is to act promptly and stay organized. By taking these steps, you can handle IRS notices confidently and minimize any stress they might cause.
About the Author:
I’m Coach Ktasha (Tasha), and I help entrepreneurs simplify taxes, structure their businesses the right way, and create marketing strategies that bring in more clients. Running a business doesn’t have to feel overwhelming—I provide expert, no-fluff guidance so you can focus on growing your income and reaching your goals with confidence.