When the Internal Revenue Service (IRS) has a question about a taxpayer’s tax return, needs to request a payment or notify someone about a change to their account, the IRS will commonly mail the taxpayer a letter or notice.
It is important to note that some cyber criminals will pretend to be the IRS in an attempt to gain access to your personal information via tax scams. Here are some helpful tips to know if the real IRS is contacting you or if someone may be trying to scam you. You can also learn more in JNBA’s special podcast series about cyber security. Part one of the three episodes can be accessed here.
When an IRS letter or notice arrives in your mailbox, here are a few steps to consider:
Read the letter carefully and understand what is being asked of you.
IRS letters are usually about federal tax returns or tax accounts. Notices usually deal with specific issues and have instructions about what to do.
Review the information.
A letter from the IRS is often about a changed or corrected tax return. Review the information in the letter and compare it with the return you have on file. If you agree, you typically do not need to take action. You may need to take action if you do not agree with the information, if you owe money, or if you need to supply the IRS with additional information.
Contact your tax professional.
It’s a good idea to reach out to your tax professional, and even your financial advisor, to notify them you have been contacted by the IRS. Your professional partners may be able to help you respond to any necessary requests.
Reply only if you are instructed to do so.
Generally, you do not need to respond to a tax letter or notice. If you do need to call the IRS, use the number in the upper right-hand corner of the notice and have a copy of your tax return and letter ready.
Take action in a timely manner.
Taking action within the stated period of time may minimize potential interest and penalties.
What to do if you disagree with the IRS notice:
Dispute your notice in writing.
If you don’t agree with the notice or letter you received from the IRS, you should mail a letter explaining why you dispute the notice. Send it to the address on the contact stub included with the notice. Be sure to also include information and documents for the IRS to review when considering your dispute.
Keep the letter or notice for your records.
Keep all records, including adjustments and amendments, for at least three years.
If you want help understanding a letter or notice from the IRS, or if you want someone to take a second look at a communication that seems suspicious, contact your JNBA Advisory Team. We can review and connect with your tax professional as we work together to understand next steps. As your financial advocate, we are here for you.
Due to various factors, including changing market conditions and/or applicable laws, some of the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors.
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