How to Respond to IRS the Most Common IRS Notices

Accounting blog: How to Respond to IRS the Most Common IRS Notices

I received a notice from the IRS, how should I respond?

The Internal Revenue Service (IRS) is an agency of the United States Department of the Treasury that collects taxes and enforces federal tax laws. The IRS was created in 1862, and has been a vital part of the United States government ever since.

If you receive a letter from the IRS, you may be panicking.

However, if you know what to do ahead of time, you will be able to get on top of your situation fairly quickly.

Here are some ways to respond to a letter from the IRS.

Notices the IRS most frequently send

The letter should contain details about the IRS’s decision to send you a notice.

You’ll know whether they’re going to audit your taxes, or if they’re going to request more information from you.

The letter should also contain information about how much time you have to respond.

If you receive a notice from the IRS, it is important that you do not ignore it.

You need to read the letter and take action as soon as possible so that you don’t miss any deadlines.

Types of notices you may receive from the IRS include:

  • Notice CP521 – The IRS is reminding you that you have an installment payment due
  • Notice CP504 – A “Notice of Intent to Levy” meaning you have an unpaid balance
  • Notice CP12 or CP24E – The IRS noticed a mistake and you will be given a refund (or your refund amount will change)
  • Notice CP44 – The IRS is delaying your refund while they determine whether or not you owe
  • Notice CP180 or CP181 – The IRS is notifying you that you have a missing form or schedule

Get a more detailed overview in our article Understanding the Most Common IRS Notices, Letters, and Codes

What should I do with my letter from the IRS?

Receiving a letter from the IRS can be stressful, but you can take steps to simplify this process.

The first thing you should do is read the letter.

It will explain what type of tax you owe and how much it is for. You may notice that the date on the letter is in the past, which means you’re late on your payment.

We also highly recommend you contact a local accounting firm to discuss your options and the details of your notice from the IRS.

The first thing you will need to do is read the letter carefully.

The letter will outline the problem and make a request for information, like your social security number or tax return.

It will also include an acknowledgment that you received the letter.

If the IRS makes a request for information, you should send it back as soon as possible.

If the request is about your tax return, include all relevant documents with this information. If there are any questions on something you’ve submitted, be sure to write down your answer to those questions before sending it back to the IRS.

If you disagree that you owe money or think that there is an error in their calculations, reply in writing with an explanation of why you disagree and how they got it wrong. You can also attach any documentation supporting your claim.

The IRS might take some time to review your rebuttal and come back with a response.

Be patient when waiting for a response from them—it may take up to 10 weeks for them to get back with a reply!

The importance of your response to your IRS Notice

The IRS is an agency that is not to be trifled with. When you receive a letter from the IRS, you need to make sure that you respond accordingly. If you think the letter is a scam and ignore it altogether, you could be subject to penalties and fines. The IRS will also continue to take steps against you and your company if they feel like their responses are not being taken seriously.

There are three possible ways that the IRS can react if they do not hear back from you:

  • They will begin working on your case as normal and enter into correspondence with your tax attorney or representative. This means that they will send more letters, requesting information or clarification about your case.
  • If the IRS feels like there has been an administrative oversight, they may request additional documentation from your company in order to rectify this oversight.
  • If the IRS feels like there has been no response at all and no communication with them, they may treat it as a delinquent taxpayer and impose penalties and/or fines for noncompliance, which can end up costing quite a lot of money.

Hire an accounting firm to help respond to your IRS Notice

The IRS is an agency of the United States Department of Treasury that collects taxes and enforces federal tax laws.

To get on top of your situation fairly quickly, please refer to these six steps for responding to a letter from the Internal Revenue Service.

If you need help, you can contact the St. Louis accountants at Volpe Consulting and Accounting.

More from our blog