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IRS letters: Everything you need to know!

Published on: Published in: Taxes

IRS letters: Everything you need to know

The Internal Revenue Service (IRS) sends out communication with taxpayers every day. These letters are sent out for a variety of reasons and are not a reason for you to panic. IRS letters can be sent when you have a balance due, or there has been a change in the refund amount that you should get. Sometimes they are sent to ask you for verification of ID, or to provide additional information, or even to notify you about delays in processing something for you.

Whatever the reason, every communication from the IRS should be taken with the seriousness it deserves.

What do IRS letters look like?

A proper IRS letter will come in a marked government envelope and a seal on the letter. It will also include the following:

  • A letter-number; this will typically be in the top right-hand corner.
  • Your tax ID number(truncated) and the year/s in question. These will also be on the top right-hand corner of the letter.
  • IRS contact information and should include a 1-800 number. This comes right after your tax ID information.
  • A detailed guide on how to pay any balances that due. This will include all the payment options available in your state. It will also have a disclaimer that you should only make out checks to the U.S. Treasury and nowhere else.
  • Additional information about all the rights you enjoy as a taxpayer. It should look like

What do you do once you receive an IRS letter?

If one of these arrives in your mailbox, do not panic. Most IRs letters require nothing more than a response from you for the issue to be handled. The first thing is to make sure that it is genuinely from the IRS by looking out for the signs mentioned above. After this, read through the letter carefully and find out what the letter is about. If they have made any changes to your return, make comparisons with your earlier return to confirm.

If your letter requires a response that is barred by date, make sure it has mailed by then. Some replies that are needed by a specific date limit your rights of appeal if you don’t send it in by then. Sometimes, they carry interest on amounts that you should pay or even a penalty.

If you understand everything clearly in the letter, make sure you pay as much as you can, if it a balance issue. Any payments to the IRS should be made to the methods outlined in the letter only! Finally, keep a copy of all your IRS letters or notices along with all your other tax records.

If anything is unclear, no matter how small, make sure you contact a competent tax preparer. A professional will go through it with you and make sure you are on the right side of things. For most people, this is the preferred method of handling communication from the IRS. Using a credible tax preparer is a more accurate way of dealing with the taxman and comes with less hustle.