| By Alicia Sisk-Morris, CPA, ME |
You open your mailbox, and there you find a letter or notice from the IRS. Remember, letters are how the IRS communicates with you. They will not pick up the phone and call you, demanding a tax payment (those calls are likely from people trying to con you). The IRS mails millions of letters to taxpayers every year.Don’t ignore the letter: You can respond to most IRS notices quickly with a phone call or written correspondence. Follow the instructions within the letter: Make sure you read the notice or letter carefully. It will tell you if you need to take any action. It will also give you information on who to contact should you have any questions. If you do not understand the letter, I suggest you share it with your CPA so that he or she can help you further.
Focus on the Issue: The IRS notices usually deal with a specific issue on your tax return or your tax account. Your notice or letter will explain to you the reason the IRS contacted you. It will also give you instructions on how to handle the problem.
Correction Notice: If the IRS corrected your tax return, you should review the information provided and compare it to your tax return. If you agree, then you do not need to reply unless a payment is due. If you disagree with the changes, it is important that you respond.
Premium Tax Credit: The IRS may send you a letter asking you to verify or document your premium tax credit taken on your tax return. You should follow the instructions. Usually, they are requesting that you fill out additional tax forms to document your credit and provide to them proof of your insurance coverage.
You do not need to visit the IRS: Most issues can be handled over the phone or through the mail.
Keep the IRS Letter / Notice: Keep a copy of the document with your tax files for future reference. You may receive additional documentation pertaining to this letter so it is smart to keep everything together.
Watch out for Scams: Don’t fall for the phone and phishing email scams that use the IRS to lure in victims. The IRS will contact you about unpaid taxes by mail first – not by phone. Be aware that the IRS does not initiate contact with taxpayers by email, text, or social media.
For more information, you can review the IRS Tax Topic 651 and 653.
Alicia Sisk-Morris is a CPA with over 20 years’ experience. Her firm services individuals, small businesses and not-for-profit clients that range from solo-entrepreneurs to artists, alternative and traditional medical professionals, construction firms, real estate professionals, schools, and start-ups. Alicia is an instructor for AB Tech College, SBA workshops, and the Western Women’s Business Center, and a public speaker and trainer. Alicia has a degree in Business Administration from UNC – Chapel Hill, and a Masters of Entrepreneurship Degree from Western Carolina University. Learn more at: www.siskmorriscpa.com.