I Received an IRS Notice, What do I do?

Each year, the Internal Revenue Service sends millions of notices to taxpayers for a variety of reasons. Notices may request payment of taxes, notify you of changes to your account, or request additional information. Each notice covers a very specific issue about your account or tax return. Here are a few easy steps on what to do if you receive an IRS notice.

  • Do not panic. Many of these letters can be dealt with simply and painlessly. Each notice offers specific instructions on what to do to satisfy the inquiry. Most correspondence can be handled without calling or visiting an IRS office. Often, nothing is wrong; the IRS just needs more information.
  • Notify your CPA or tax preparer. If the notice is due to a correction to your account, a review should be done to compare the correspondence with the information filed on your original tax return.
  • Determine corrective actions. If you agree with the correction to your account, usually no reply is necessary unless a payment is due. If you do not agree with the correction the IRS made, it is important that you respond as requested in a timely manner. A written explanation of why you disagree should be attached to the notice and sent to the Internal Revenue Service. Additional supporting documentation and information should also be attached to justify your explanation.

Allow at least 30 days for a response from the IRS. It is very important that you keep copies of any correspondence with your records. Remember, tax records should be kept for at least five years.