How Should You Respond to a Letter From the IRS?

Chad Silver

Chad Silver

Managing Partner of Silver Tax Group, author of the book "Stop the IRS". Practicing a variety of tax issues, regulations, laws and rights. Specializing exclusively on tax matters involving IRS audits, negotiation, settlements & compromises.

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On behalf of Silver Tax Group posted in IRS Tax Audits on Friday, August 12, 2016.

What comes through the mail anymore? Catalogs, offers for new credit cards and other junk seem to form the majority. You may only look forward to collecting the mail during the Christmas season for the cards and family/friend yearly updates.

If you have stopped going through the mail and just dump it into a stack, you need to be aware that there is one federal agency that still relies on the mail. It’s the IRS. If you receive a letter from the Service, you need to open it right away. In this post, we lay out steps for responding.

The 3 steps for responding to the IRS

In the first step, you must overcome the desire to leave the letter unopened in a pile of mail. You may tell yourself that you will deal with it next week or next month when you are not as busy. This day will never come: open the letter right away.

Next, read through the notice and figure out what action the agency has taken. The notice should explain:

  • Any changes that the IRS is making to your return
  • Why the change is necessary
  • Where you should send a response

An informational notice may relate to a credit or something else. These are the easy ones and can be filed into a tax folder. These generally do not require a response.

A notice that mentions a change related to an incorrect return, underreported income or a tax audit are more serious. You will need to do some leg work to figure out how to solve the problem.

The last step when the notice claims you owe a significant tax bill is to immediately call a tax attorney. Penalties and interest are civil issues. But depending on the facts of your situation, criminal charges might also be on the table. An attorney can assist by developing a strategy to minimize the possible consequences.

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