After a couple of weeks writing about potential scams that surround the tax world, it is time to look at something different. I am going to go in the complete opposite direction and talk about if you receive actual communication from the IRS.
First off, this feels scary. The minute you receive a piece of mail from the IRS just the agency’s logo sends your brain spinning into awful places envisioning a problem you cannot afford to handle. Do not let this fear take over, though. No matter what is inside the envelope, you will not improve the situation by ignoring it.
So next, assess what the matter really is. It is possible that it is minor and can be taken care of with minimal pain.
Realistically, however, this is probably something that is going to take more work than that. If we prepared your tax return, contact us. We will help guide you through the process. And it is a process that is going to be time-sensitive, so don’t hold off. The more time we have to handle things, the better we can do so.
This is especially key if the issue leads to an audit. In that situation, we can offer the assistance to back up why your tax return looks the way it does. This is where so much of the advice we give in this space during the tax season comes into play – the more paperwork you have properly recorded and filed, the easier it is to give the answers that will be needed.
If you did your own tax return and received that notice, that can be even more disconcerting, for you will immediately question if you did things right. Reaching out for professional help could be even more crucial at that point to try to mitigate any potential damage.
No matter what the situation, though, remember to not be ruled by fear, assess the situation, and get help if needed. Handling problems head-on is always the best choice of action in the long run.
This also seems like a good time to talk to those who have not filed their 2018 taxes yet. The IRS may not have contacted you about this yet, but they are going to if you do not stay on top of this. And again, avoiding it will not help.
Remember, too, that if you owe taxes, you are not getting away with not paying them even if you have filed an extension. That amount owed was still due back in April and is building interest and penalties. It is even possible that you have not filed yet because you know you are going to owe money and you don’t think you can afford the bill. That bill is only to grow as you ignore it, though. Leniency is not gained by hiding and you may be able to start working out a process that will ease the burden if you handle it now.
So yes, even those who are on extension, I know you have a few months left to go, but it can be to your advantage to get to work now.
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To ensure we don't make the folks at the IRS ornery, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.