What should you do if you or your business receive an IRS notice?
If you or your business receive an IRS notice in the mail, DON’T PANIC!! Follow these basic steps and it will help keep your panic and worry level to a minimum.
- Open The Notice – Now this may seem very basic, but you would be surprised at how many people don’t even open the notice and go right into panic mode. By at least opening the notice you can see what exactly you are dealing with.
- Identify The Issue – Now that you have opened the notice, look in the upper corner of the notice to see first what year and form the notice is in reference to. Is this notice in regards to your business or is it in regards to your personal taxes? This will help refresh your memory of that particular year and form. This will also get you thinking about step #4 and how to proceed.
- Read The Notice Carefully – Once you have identified the issue and jogged your memory of the year and form in question, then calmly and patiently read the notice to see what the IRS is saying. Are they asking for correspondence? Are they saying there is a time frame for getting back with them? Are they just informing you about your refund? Does the notice require you to go into the IRS or is it just that you need to mail in correspondence? Is there a due date? What actions are they asking for?
- Gather Your Documents – Now that you have identified the issue, form, and year you are ready to go and get your support documents. Gather those documents from your records. Once you have these documents take a look at them and see if you agree with the IRS letter. If you don’t agree make copies of your records that support your reason.
- Respond Promptly – Make sure that you respond promptly to the IRS notice. If you require additional time to gather your documents or to seek professional help contact them and ask them to put a note on the file that you are looking into and working on the notice. Be sure to write down the name and ID# of the IRS agent you talked with.
- Be Very Detailed – When writing back to the IRS to address the notice make sure that you are very detailed in the letter. Explain the situation and support documents. You want to write your correspondence so that someone on the outside that doesn’t know your situation can look at the issue and easily determine what it is you are trying to get across to the IRS.
- Keep Copies Of IRS Correspondence – Keep copies of everything such as the notice you received, the letter you sent them, support documents, IRS agent you talked with on the phone.
- Hire Professional Help – If after looking at everything in the notice and you are still overwhelmed it may be in your best interest to hire professional help to take care of the situation. Even if you are at this point, it will still help your worry level to go down by at least following steps 1 – 3 above. I have seen clients that were very worried about an un-opened notice they have brought me that had they opened the notice they could have saved themselves a lot of worry.
Again, if you or your business receive an IRS notice don’t panic. Lots of notices are sent out each year by the IRS and you are not alone. Follow the steps above and if you still need help feel free to contact us.