A Letter From the IRS? Uh-Oh. But Don't Panic!
NEW YORK (TheStreet) -- You filed your 2011 federal and state income tax returns on time and received, and probably already spent, your refunds. Then yesterday you got a notice in the mail from the IRS, or your state tax agency, telling you there was an error on the return and you owe additional tax, penalty and interest!
In 2011, the IRS received over 1.8 billion 1099s, 1098s, W-2s, and other such returns reporting income and deductions for tax year 2010. The information on these returns was matched against 141 million 2010 individual income tax returns. The Service found almost 20 million "alleged" discrepancies and issued a CP-2000 notice to 4.7 million taxpayers explaining what they thought was wrong and asking for payment of additional tax.
There are 2 basic rules when you receive correspondence from the IRS or a state tax authority:
On the other hand...
Yes, it's deductible, but...
Can I deduct my gym membership? --By Robert D. Flach Robert Flach has more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro. Follow TheStreet on Twitter and become a fan on Facebook.
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