I Received an IRS Notice!!

  • Aug 5 2016

First, do not panic. Second, open the letter. The most common reactions I see is that the taxpayer panics and is too afraid to open the letter and then seek help. So, what happens if you ignore the letter? You may lose your rights to make corrections and to appeal decisions. These notices usually have important dates that are deadlines to reply. If you miss the deadline, you may have missed your opportunity to easily correct the situation. However, even if this occurs, there may be other avenues to take, depending on the circumstances.

If you do receive the letter and it is something you think you can handle yourself, call the number on the notice and talk to the IRS. They will assist you to a certain extent. However, you do need to know your rights. The IRS does make mistakes. When you think about it, how easy is it to make a typing error? Possibly, a number is put in the wrong place in the system and because of that misplaced number, the system calculates that you owe additional tax. You may not. It may just be an error.

It may be that you received income, such as winning the lottery, and did not report it, because you thought it was not taxable. The IRS may automatically send you a notice that you owe additional taxes. They do not know what expenses contributed to the additional income. If it was the lottery winning, how many tickets had you purchased that year before you won? That may be a deduction that you can take to help reduce your taxes. The IRS would not know this information. However, if you received the notice and did nothing about it, and then received additional notices and did nothing about them, at some point, you would lose your ability to contest the additional tax that the IRS calculated.

So, again, do not panic and open the letter. Read it and respond, or hire a competent tax professional who can assist you with the problems. It is easier and less costly to address the problem immediately than to try to correct it after the deadlines for responses have passed.

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