You open your mailbox and see a “scary” looking letter addressed to you from the IRS. It’s a notice of payment due. What should you do?

Do not automatically assume the letter is correct and submit payment to make it “go away”. There have been many recent tax law changes and very little time to implement the changes – the IRS can be wrong, and it happens more often than you’d think. These IRS letters, called correspondent audits, need to be taken seriously, but not without undergoing a solid review. So, what should you do if you receive one?

Open the envelope. Remember that the first step to taking care of whatever issue lies inside the envelope is to open it. Stay calm and try not to over-react to the correspondence. We know this is easier said than done, but remember the IRS sends out millions of these types of letters each year. Most of them correct simple oversights or common filing errors.

Review it. Review the letter and understand exactly what the IRS is telling you needs to be changed, and determine whether or not you agree with their findings. Speak to your tax professional to gain understanding and determine what next steps should be.
Timely Response. The IRS will include in the letter what they believe you should do and within what time frame. Do NOT ignore this information. Delays in responses can generate penalties and additional interest payments.

Help is a phone call away. You are not alone. Utilize your tax preparer and planner, who deals with this all the time. At RMS Accounting we are here year-round to help you should an issue with your return arise.

Don’t assume the problem is resolved. Do not ignore the letter and be on the lookout for further correspondence. Until you receive definitive confirmation that the problem has been resolved, you need to assume the IRS still thinks you owe them money. If no correspondence confirming the corr3ection is received, a written follow-up to the IRS will be required.