In this article we are going to address how to deal with the IRS. We are also going to go over some information you should have if you receive an IRS notice.
Let’s assume for a moment that you are a good taxpaying citizen and have filed your tax returns for the last few years. You have filed them timely, and paid your taxes with Uncle Sam.
Then it comes. That day; when you receive the letter from the IRS. For most taxpayers, the IRS letter you will receive will be a CP2000 notice. These are automated notices that the IRS sends out which tell you the information you filed does not match with the records the IRS has on file. There are a couple of very important facts about this notice:
- The IRS does screw up! You may owe less than the notice states, or nothing at all, but…
- You cannot ignore this notice even if you believe you do not owe any money (we will cover this at length in a minute)
- Take a minute to make sure that you owe taxes with this notice, and that the notice includes only known income sources.
- Take out your tax return and compare it to the notice you received. Obviously you will be looking for differences between the summary information in the IRS letter, and your filing.
- It takes time for the IRS to process information. Often it can take more than 90 days for the IRS to process one form. For this reason, the IRS is often dealing with old information.
The next step is usually to call us! We offer complimentary reviews of these notices to our clients, and in many cases can resolve the issue with the IRS without charging you for the service. There are a few reasons why we help taxpayers to fight these IRS letters:
- The information on the IRS notice is inaccurate
- There are additional credits that are available due to the adjusted income
- There are additional expenses that can be applied to income before assessing tax that the IRS either did not know about, or did not process correctly
- The IRS is understaffed and often unavailable. Tax professionals have tools available to deal with the IRS directly, that are not available to the general public
- We know how to deal with the IRS, and know how to work within their systems to get results
If you decide not to consult an professional on the matter, it is important that you know a few facts. An IRS CP2000 notice becomes final and accepted as an adjustment to your return, if you do nothing 30 days after the notice issuance date. So, you only have a limited amount of time to ask that the IRS change the information contained on this notice. Once the IRS has adjusted your return for a CP2000 notice, you will usually receive a bill from the IRS. Even after the IRS has billed you, there are still things you can do to eliminate or minimize this tax bill, especially if you believe you do not owe the taxes due.
If you have not filed your returns and paid taxes over the last few years, we should also talk, but that is not the focus of today’s article. IRS notices are very important and timely pieces of information. For this reason, it is important to understand what the notices mean. If you have received IRS notices and are concerned about what will happen to you or your business. Contact us