Podcast: IRS Letters and Notices

Irs Letters And Notices

Written by Jeff Dvorachek

April 26, 2022

With the multiple stimulus payments, the increased complexity of the tax code and a bunch of new forms, I don’t think there is an easy return anymore. And because of this, we have seen an increase in IRS and state notices. Most of the notices are due to the IRS matching program. No one likes to receive correspondence from the IRS, but having a better understanding of them can lower your stress level if one comes.

WHAT KIND OF NOTICES HAVE YOU BEEN SEEING?

  • Largest one by far is the stimulus checks received was not properly reconciled to the tax return.
  • You have a balance due or they changed your refund
  • They need to verify your identity
  • They need additional information
  • They changed your return for some reason

CAN YOU GIVE ME SOME EXAMPLES OF NOTICES THAT SOMEONE MAY RECEIVE

  • Many different kinds of notices – most popular is CP2000
  • IRS collects W-2, 1099s, etc
  • Uses this information to match the information on your return
  • Most times – no human has looked at this information

WHAT TIPS DO YOU RECOMMEND IF SOMEONE GETS A NOTICE

  • Don’t ignore it
  • Follow the instructions
  • Focus on the issue
  • If the IRS corrected your return, let them know if you agree or do not agree with their changes.
  • Correspond in a timely manner
  • Keep a copy of the notice and your response with your tax material

HOW DO I KNOW THIS IS NOT A SCAM

  • If the notice comes in the mail (which most do), and the information provided matches a return that was filed, you can feel fairly comfortable that the notice is legitimate. If something still does not look right, you can talk to a CPA or call the IRS directly.
  • The IRS in rare circumstances will call, but this is very rarely and only occurs after they have first set you numerous letters or notices. An unsolicited call from the IRS should not be returned or answered. If you are concerned that it might not be legitimate, call your CPA or the IRS directly.
  • You may also receive an email claiming to be from the IRS that asks for personal information or say that you are entitled to a large sum of money. The IRS has set up an email account to forward these emails. It is phishing@irs.gov.

Knowing a little about the IRS processes when it comes to letters and notices can help lower your stress when one does come. Just remember, in most cases, they are just looking to clarify your account. Be sure to talk to a tax professional if you have any questions about IRS letters and Notices you might receive.

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Jeff Dvorachek
I joined Hawkins Ash CPAs in 1998. I am the partner-in-charge of the Manitowoc, WI, office and tax director for the firm. I have thorough experience providing tax services to individuals, commercial businesses, nonprofit entities and estates and trusts. I also provide compilation and review services. I lead the Tax Committee and am a member of the Information Technology Advisory Committee.

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