What To Do When You Receive A Letter From The IRS?

Most IRS letters are routine: a question about your return, a change to your refund or a balance due. Read it carefully, confirm it’s real, and respond by the date shown.

By the James Family Tax team

Receiving a letter from the IRS can cause even the most organized person to panic. But there are many reasons the IRS sends out letters; most of the time, it’s to give you an update on your tax return, and if there is an error, it can be corrected.

So, what do you do when you receive a letter from the IRS?

First, open the letter.

It’s essential to open a letter from the IRS and not ignore it.

Second, don’t panic.

Take a deep breath. There are many reasons why the IRS might be trying to contact you, and most are to get additional information from you or update you about a change on your tax return.

Some reasons that you receive a letter from the IRS might be:

You have a balance due
You are due a larger or smaller tax refund
The IRS has a question about your tax return.
The IRS needs to verify your identity or a dependents identity.
The IRS requires additional information from you.
The IRS made a change to your tax return.

Third, Read it.

You will want to read the notice carefully and thoroughly. If you don’t understand the letter, you can reach out to a trusted tax preparer, and they can help you understand the letter.

Compare the information on the letter with your tax return and verify that information is correct.
Believe it or not, errors happen, so it’s possible that the letter sent to you has incorrect information & needs to be amended or verified.
If you agree with the information provided in the letter, then there is no reason to contact the IRS.

Fourth, please Don’t Ignore it.

Okay, you read it, so now you can set it aside and forget about it, right? Nope.

Some letters have a date that the IRS wants you to respond by. Don’t ignore that date.

Ignoring the due date could cause

Delays in processing your tax return
Additional interest and penalty charges

Fifth, Pay the Balance.

Even if you can’t pay the total balance, you should pay as much as possible.

The IRS has payment arrangements that can be made.
The IRS offers several payment options found here : https://www.irs.gov/payments

Your first reaction might be to pick up the phone and contact the IRS. However, that might not be needed.

If you agree with the information, you can take the next necessary step by the date of the letter.
If you disagree with the letter, the IRS needs more information from you, or you owe a balance, you can reach the IRS by calling the phone number in the upper right-hand corner.
Have a copy of your letter when you call.
Wait times may be prolonged.

Tax Tip: Make sure you keep a copy of the letter for your records.

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