The IRS Letter You Don’t Want to Receive

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The IRS Letter You Don’t Want to Receive

By: Rich Chappo..

Picking up the mail each day should not be hazardous to your health. That being said, there are a few letters you can receive which can raise your blood pressure. Getting one from the IRS that does not contain forms is surely the stuff of the end of the world.

The first thing you will notice about the letter is it is thin. This should worry you. If it contained forms it would be thick. As you open it, you see at first glance that it is not a form letter. This one has your name and social security number on it.

A thin letter from the IRS usually contains something known as a notice statement. A notice statement is issued for one reason only. The reason is the IRS has determined there is something fishy with your taxes. Okay, now you can panic.

Now, it can be said in truth that the ubiquitous notice sometimes is a good thing. The problem can be that you paid too much money. I had this happen once. Eighteen dollars. This is, however, admittedly a rare event and the news usually is not positive.

The bad news is you are probably being audited if you receive this letter. Go ahead, cry. Let it out. Once you are done, actually read the full letter. The audit may not be the torturous event you are imagining. In fact, it rarely is.

For the majority of people, the indication you are being audited is not the foreshadowing of a rough time you might expect. Instead, you stand a good chance of receiving what is called a correspondence audit. Yep, you get to deal with everything by letter.

With this type of inspection, the IRS tells you point blank what it is having a problem with in regard to your taxes. The agency will usually suggest a way it can be resolved and any impact on what you owe. There is no person to person interaction.

At this point, you have a couple of choices. You can agree to the change by usually doing nothing. Alternatively, you can contest it by sending in a letter indicating as much and why you disagree. Finally, you can get on the phone and argue about it.

If you agree with the proposed changes, the correspondence audit is resolved and you are done with it. If you disagree, you may turn a molehill into a mountain. It may be wise to hire a tax attorney to help you with the coming brawl.

If you receive one of these letters from the agency, don’t feel like you are being picked on. The IRS sends out millions of them each year to handle issues with taxpayers. If you get a particularly nasty one, go talk to a tax attorney so you know your rights.