An envelope from the IRS can be unsettling. Your first instinct may be to set it aside, assume the worst, or hope the issue resolves itself.
Ignoring an IRS letter or notice, however, can turn a manageable question into a more expensive problem. The notice may require a response, request additional information, explain a change to your tax return, or identify an unpaid balance.
The most important first step is simple: open the letter and read it carefully.
Why the IRS may contact you
Most IRS correspondence relates to a federal tax return or tax account. The letter should explain the specific issue, why the IRS is contacting you, and whether you need to take any action.
An IRS letter or notice may concern:
- A correction or adjustment to your tax return
- A balance due or payment request
- Missing or incomplete information
- A question about a tax credit
- Changes made to your tax account
- Documents the IRS needs to review
Receiving a notice does not automatically mean you are being audited or accused of doing something wrong. In many cases, the IRS is requesting clarification or notifying you about a proposed change.
Review the notice carefully
Compare the information in the notice with your original tax return and supporting records.
Check the tax year, the amounts shown, and the explanation provided. The notice should also include a response deadline and instructions explaining what to do next.
If you agree with the change, you may not need to respond unless the letter specifically asks you to do so. You should still update your records and retain a copy of the notice with the related tax return.
If something does not look right, do not assume the IRS has all the information it needs. A discrepancy may be caused by a missing document, a payment that was not correctly applied, or information reported under your Social Security number or business tax identification number.
Do not miss the response deadline
Some IRS notices are informational, while others require action by a specific date.
Responding promptly can help prevent additional interest, penalties, collection activity, or the loss of certain appeal rights. Waiting until the deadline has passed may also make the issue more difficult to resolve.
The correct response will depend on what the notice says. You may need to provide documents, explain why you disagree, make a payment, or request another payment arrangement.
Before sending money or responding on your own, make sure you understand exactly what the IRS is requesting.
What if you disagree with the IRS?
You have the right to question or dispute an IRS determination.
The notice should explain how to respond and where to send your supporting information. Your response should clearly identify the issue and include documents that support your position.
This is an area where professional guidance can be especially valuable. Sending an incomplete response—or providing information that does not directly address the notice—may delay the process or create additional questions.
We can help you review the notice, compare it with your tax return, and determine the most appropriate response.
Keep the notice with your tax records
Do not throw the letter away once the immediate issue has been handled.
The IRS recommends keeping notices and letters for at least three years from the date the related tax return was filed. This includes adjustment notices and correspondence showing how an issue was resolved.
Depending on your circumstances, you may need to retain certain tax records for longer. Keeping the complete correspondence together can be helpful if the same issue appears again or affects a future return.
Make sure the letter is legitimate
The IRS generally makes initial contact through the mail. It will not begin a tax matter by sending you a direct message on social media.
Still, scammers often use the IRS name to create fear and pressure people into making immediate payments or disclosing personal information.
Be cautious when a message demands payment through gift cards, cryptocurrency, wire transfers, or another unusual method. You should also avoid calling telephone numbers from suspicious emails, text messages, or social media posts.
When reviewing a mailed notice, use the contact information printed on the notice or have a tax professional verify it before responding.
You can learn more through the IRS resource on understanding an IRS notice or letter.
Received an IRS letter or notice? We can help
An IRS notice should be taken seriously, but it does not need to cause panic.
The right response begins with understanding what the IRS is asking, whether its information is correct, and what deadlines apply. Before you pay an unexpected balance or send documents to the IRS, it is worth having the notice professionally reviewed.
Torkelson & Associates CPAs can help you understand the letter, evaluate your options, and prepare an appropriate response.
Contact Torkelson & Associates CPAs for assistance with an IRS letter or notice.