The dreaded IRS letter. It can mean anything or nothing at all. As tax season for the 2016 tax year is coming to an end for most, so begins the IRS outreach for many. So you’ve received a letter from the IRS. Now what do you do? Before proceeding with a tip sheet the Golden Rule is DO NOT IMMEDIATELY IGNORE IT.
The Treasury Inspector General for Tax Administration (TIGTA) recently released a report reflecting how the IRS will crackdown on information reporting, particularly with the Affordable Care Act(ACA), using the IRS’s new ACA Compliance Validation (ACV) System and/or other automation tool. So yes, ignoring an IRS letter before finding out what it means is a big NO. However, here’s what else you should do if a letter lands in your mailbox.
Make Sure It’s Real.
Scams run amuck these days, and IRS scams are no exception. You can spot a fake a mile away, though. They will reach out on social media, they will call you, and they will email you. They will also ask for payment on the spot. The real IRS will do none of these things and only reach out via paper mail. However, read that paper mail carefully too, since scammers own printers and stamps as well.
Compare, Contrast, Correct, Correspond, Copy.
If a letter arrives in the mail, study it. It may be about change in information from a previous form filed, changes to a taxpayer account, or even a request for payment. Compare and contrast the information in the letter with whatever forms you have. If corrections are needed then do so. If payment is required, correspond back to the IRS with said payment. And always keep a copy of everything sent and received. Some letters are just informational, and no response is needed. Keep those letter as well.
Call, But Only If You Must.
Most IRS letters do not warrant a phone call. If you’ve received and reviewed a letter from the IRS and remain unsure how to proceed, the IRS can be reached at the phone number that is located at the top of the letter in the upper right-hand corner. Someone may be able to guide you from there. Make sure you have all information readily available to make your phone call as smooth as possible.
Respond, But Don’t React.
You may find an error in the IRS’s information, or you may spot something you disagree with in the correspondence. If that’s the case, calling the IRS (see above) and causing a ruckus may not help you at all. Instead, writing a letter to the address located on the contact information at the bottom of the letter may be the better course. Be organized in your letter’s information, explaining why you disagree with the information. Wait a reasonable amount of time for a reply.
Keep Calm And Carry On.
Getting crazed over an IRS letter will get you nowhere. Like the above, calling the IRS and reacting is not the most effective means of figuring out why you were contacted by the IRS in the first place. Keep your cool when you receive a letter from the IRS. More often than not, it’s nothing. However, never assume.
