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Greetings from the IRS
You’ve just
picked up your mail and … uh oh, there among the ads, bills and too numerous
offerings for credit cards is that official looking letter from the Internal
Revenue Service. A feeling of dread comes over you…but don’t panic or toss it,
and please DO open it. It might even be good news.
Usually, mail
from the IRS is a notification that they need verification of documents or
substantiation of an amount you have claimed on your tax return. Read the
letter thoroughly. Determine what they are looking for, and then provide the
information. Some of the most commonly missed items on a return are simple
things: You forgot to sign the 1040; You didn’t attach W-2’s and required
statements; If you’re paying quarterly, maybe you claimed the wrong amount as
estimated tax; Or, perhaps the income you listed doesn’t match the figure that
was reported to the IRS on a Form 1099 by someone who paid you during the tax
year.
If you have the
correct information, it’s a simple matter to fix. Make copies of your documents
verifying the information on your return and send the copies back to the IRS
along with a copy of the letter they sent to you. If, in fact, you didn’t
include an amount on your return that should have been there, sign the form
agreeing to the change and send them a check for the amount of tax due by the
deadline date given for compliance. Usually, penalties and interest will be
added—so, the sooner you comply, the less it will cost.
If your IRS
letter advises you that your return has been selected for audit, you would be
wise to seek professional advice. If you used a tax professional to prepare
your return, such as an enrolled agent (EA), CPA or attorney, you should contact
that person for help with the audit. If you prepared your own return, you may
wish to contact an enrolled agent immediately. Enrolled agents are authorized
by the U.S. Treasury Department to represent taxpayers before all administrative
levels of the IRS for audits, collections, and appeals. To find an EA in your
area, visit the National Association of Enrolled Agents web site at www.naea.org.
Now you’re
thinking, what about that possible good news mentioned earlier? An unexpected
refund, of course. Now, open that letter!
The author is an
enrolled agent, licensed by the US Department of the Treasury to represent
taxpayers before the IRS for audits, collections and appeals. To attain the
enrolled agent designation, candidates must demonstrate expertise in taxation,
fulfill continuing education credits and adhere to a stringent code of ethics.
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