So You Received An IRS Letter ...

Now that we are a month beyond the regular tax filing deadline, most people don’t want to think about taxes anymore. If you happen to receive a letter form the IRS, though, then it becomes impossible to not do so. And of course when this letter comes, it immediately feels huge and we envision it as a giant problem because there is no way the agency is contacting us with good news. Last week, the IRS released information informing taxpayers what to do if they do receive such a letter and I thought it was worth spending some time discussing that information because of how difficult it can be to think through things in the moment it is received.

So first, actually take the time to understand what the letter is saying. Any notice you receive will deal with a specific issue from a specific tax year. The IRS feels like such an amorphous, almost omnipotent entity that it can often feel like anything coming from it has the same difficult-to-pinpoint status. But instead, it will let you know exactly what it concerns and chances are then at least closer to 50/50 that you will be aware of what it is referring to. You may disagree with their take on it, but it may not be the surprise it feels like when it suddenly shows up in your mailbox.

And then, if you are aware of the issue and already know it needs to be addressed, the letter should also include instructions on what your next steps need to be. As long as you follow what you need to do with the agency, any visions of guys in black coats and sunglasses surrounding your home can be pushed away.

Of course, there are also cases when the information you receive may be new to you or you may disagree with the action the agency is taking. Sometimes this comes in the form of a changed or corrected tax return. If this happens, again, read the letter, see what it says, and it is possible that you forgot to include a number from a tax form on your return, and the IRS is just correcting for that.

If you completely disagree with what some notices says, though, at that point you are likely best served by consulting your tax professional. They can help you see exactly why you are receiving the letter, determine if it is worth battling and help you take forward steps from there.

Finally, when it comes to legitimacy, it is worth a reminder to say that the IRS will never contact you through social media or a text message. The first contact from the agency almost always comes through the mail. If you first hear about a tax issue that you did not know about through any means other than the mail, it is very likely a scam, deserves no notice, and no action should be taken on your part.

Warmly,

Josh Bousquet
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