Well, given that I personally received an unpleasant notice from the IRS a couple of weeks ago, I thought it might be a good idea to share some steps to take as soon as you open the notice. I say as soon as you open the notice because there’s always that first small flutter in your stomach when you see the return address on the envelope is from the IRS. But often, the notice is very innocent so wait to get worried until you at least open it and read the title of the notice.
Once you’ve established that the notice is something that requires action, here are a few suggestions of steps to take:
- Try not to panic.
- Read the notice carefully. Read it more than once to be sure you’ve understood everything.
- Take a highlighter and highlight the actions required in the notice to be sure you comply with everything requested.
- This might be a good time to call your financial advisor. They often have a great deal of experience dealing with IRS notices and will be able to effectively guide you or handle the situation for you, which I assure you is a lot less stressful!
- If you want to handle the process yourself, determine whether you agree with the stand the IRS is taking. If you do, simply follow the instructions carefully and provide the required documentation as well as any payment within the timeframe required. Send all documents and payments via certified mail with return receipt requested to ensure you have proof of receipt by the IRS. Keep copies of all documentation sent to the IRS, including copies of any checks.
- If you disagree with the position of the IRS, you can follow the instructions as well, providing documentation of why the IRS is in error. Be sure these documents are provided within the required timeframe and sent via certified mail to give you proof of receipt. Keep copies of all documentation sent to the IRS, including copies of any checks.
- Once documentation has been submitted, you just have to wait for notification by the IRS that the issue is resolved or that they are standing firm on their position. This often takes 30 days; however, with the recent government shutdown this process could take even longer.
- If you feel you need to contact the IRS, there will be a telephone number listed in the upper right corner of the notice. That number will get you to the correct department. Be sure to have the notice number available when you call so they can reference your case.
- If you feel you are getting nowhere with the IRS or, as in my case, the IRS has placed a deadline for payment that does not give you time to resolve the issue, you can contact the Taxpayer Advocate Service (TAS). The TAS is an independent agency within the IRS that assists taxpayers with IRS-related issues. They were able to put a hold on the payment requirement from me so that my amended filing could be reviewed, which should result in the elimination of the payment and the problem. The phone number for TAS is 877-777-4778. I’ll write a more detailed blog about TAS in the near future, but for now it’s just important to know how to reach them if necessary.
- Again, I strongly suggest you reach out to your tax professional to help you with any IRS issues that arise. If you don’t use a tax professional, this is the perfect time to get one! They know how to deal with IRS issues and the resolution of the issue will more likely be favorable by using a CPA or EA.