You Got a Tax Notice From the IRS, But Don't Panic
By Steve Albert
NEW YORK (AdviceIQ) -- There's death and taxes -- then there's the death-like chill when you get a tax notice from the Internal Revenue Service. Here's how to keep your head.
Each year, the IRS sends innumerable notices to taxpayers for various reasons. Your first instinct might be panic, but take a minute and relax. Many notices involve small, easily resolved issues such as a miscalculation or a need for additional documentation.
If you get an IRS notice:
Take a breath. Read the letter thoroughly to understand the reason for the notice. The letter will explain why you got the notice and what action to take. The IRS works to ensure all notices are in plain language for "clarity, effectiveness and efficiency." Again, many notices involve small issues uncomplicated to fix.request a new one. Transcripts of your returns and tax accounts are free and likely contain all the information you need. You can get them for the current year and the past three years. Get transcripts at IRS.gov on the order a transcript page or at (800) 908-9946. Review return correction notices carefully. Frequently in cases involving corrections to your tax return, you need to compare the discrepancies in the notice with the filed return. According to the IRS, if you agree with the correction you usually don't need to reply unless you owe a payment. If you don't agree with the correction, respond to the IRS in writing to explain why you disagree. Include any documents and information for the IRS to consider, along with the bottom-tear off portion of the notice. Mail the information to the IRS address shown in the lower left corner of the notice and allow at least 30 days for a response. Identity Protection page.) Forward the email as-is to firstname.lastname@example.org and delete the message after forwarding it. Retain copies of any notices. Keep them in a safe place with all your other tax records. For information about IRS notices and bills, visit IRS.gov and click the "responding to a notice" link at the bottom left of the home page. Also see Publication 594, The IRS Collection Process on IRS.gov or call (800) 829-3676 for a copy. And do not panic. -- By Steven G. Albert, CPA, is director of tax services at Glass Jacobson in Owings Mills, Md. AdviceIQ is a network of financial advisors that writes insightful articles for the public about investing and wealth management. All articles are edited by AdviceIQ's editor in chief, Larry Light. AdviceIQ certifies that all its advisors have no regulatory infractions. To subscribe to AdviceIQ's Rss feed for personal finance articles written by financial advisors and AdviceIQ editors, click here. Follow AdviceIQ on Twitter at @adviceiq.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV