Except when you are anticipating a tax refund, the IRS is not a return address you want to see on a letter. But a notice from the IRS should not cause sudden panic. No matter the tax notice, you can work with the IRS to resolve your tax issue.
Here are some quick tips on what to do and what not to do when you get an IRS notice.
What To Do If You Get an IRS Notice
If you have recently received an IRS notice, here are a few tips for what you should do:
1. Take Prompt Action
IRS problems never go away on their own, so the sooner you deal with them, the better. What’s more, IRS notice deadlines are very firm, and penalties and interest accrue quickly when you miss them. Most deadlines to pay back taxes or respond to an IRS notice are within 30 days, but some deadlines are shorter or longer depending on the specific notice. Verify the deadline in your IRS notice and take prompt action.
2. Review IRS Notice Information and Instructions Carefully
IRS notices are thorough when it comes to information about your tax issues and instructions about your options and next steps. Read your IRS notice carefully, and if you still have questions, your notice informs you how to best contact the IRS to get answers. Usually, there is a toll-free IRS phone number on your notice.
3. If You Owe the IRS, Pay Your Back Taxes or Request IRS Tax Relief ASAP
If your IRS notice indicates that you owe back taxes, you should pay your tax debt or request tax relief as quickly as possible so that additional penalties and interest charges are not added to your tax liability. If you are dealing with a financial hardship, you might qualify for an Offer in Compromise (OIC), where the IRS accepts a lower amount than what you owe in back taxes. Otherwise, you can set up an IRS installment agreement and make affordable monthly payments to pay off your tax debt.
4. Respond If You Disagree with Your IRS Notice
If you disagree with your IRS notice, contact the IRS to dispute it. Your notice includes an IRS phone number if you have questions. There is also an IRS mailing address in your notice where you can send tax information and other documents to support your dispute.
Be sure to respond to the IRS before your notice deadline. You will hear from the IRS in 30 or so days after responding.
5. Call the IRS Number on Your Notice If You Have Questions
If you have any questions about your IRS notice, call the IRS phone number on the notice to speak with an IRS representative. Believe it or not, the IRS wants to help you. It does not benefit them if you do not pay or respond because you do not understand the notice or disagree that you owe back taxes.
Read more: “How to get an actual human being on the phone at the IRS”
6. Avoid Scams
Unfortunately, scammers love to take advantage of people’s fear of the IRS by sending fake letters and notices that prompt victims to respond with sensitive personal and financial information. You can avoid these scams by calling the IRS at 800-829-1040 or viewing your online IRS tax account to see if you actually owe the IRS and how much you owe.
Note that the IRS will never send you a text message or contact you through social media to first notify you of a tax issue.
What NOT To Do If You Get an IRS Notice
Here are a few tips for what you should NOT do when you get an IRS notice:
1. Don’t Ignore Your IRS Notice
Ignoring an IRS problem will not make your tax issues go away. What’s worse, ignoring an IRS notice adds penalties and interest to your back taxes and can even lead to wage garnishment, bank levies, and losing assets like your house and car.
2. Don’t Throw Away Your IRS Notice
Just because you throw your IRS notice away does not mean the IRS does not have a record of your tax debt. Like ignoring an IRS notice, throwing a notice away will only lead to more aggressive collection efforts and penalties.
From federal tax liens to levies and seizing refunds, the IRS has many ways to take your money and property to offset your back taxes.
3. Don’t Panic if You Get an IRS Notice
The IRS will work with you. They are not going to wipe your bank account or take your house as long as you are working with them and making a good-faith effort to take steps to resolve your tax issue. If you cannot pay your full tax debt, the IRS offers tax relief programs for back taxes, so do not panic when you first get an IRS notice.
4. Except in Specific Situations, You Don’t Always Need to Reply to the IRS Notice
Generally, unless the IRS specifically requests a reply, or you are making a payment or filing an appeal/dispute, you do not have to send an IRS notice response. That said, do not hesitate to contact the IRS or contact us here at Wiztax if you have specific questions or need additional clarification regarding your notice.
How Can Wiztax Help?
You have options. Call us today at (866) 568-4593 to learn more about how we can help, or start here to take our free online evaluation.
6 Simple Questions. Free Evaluation.
Join our Newsletter
Enter your email address to join our free newsletter. Get all the latest news and updates.