“Don’t panic!” You open that mailbox, and there sits a letter from the IRS. Your heart starts racing, your mind goes blank, and you’re in panic mode! You start anticipating bad news while you stare at that envelope without opening it. We get it, you’re scared of what they have to say. But we’re here to tell you to RELAX! Getting the issue resolved may be easier than you think! Plus, ignoring the notice won’t make it go away. Here’s what to do if you receive that IRS notice.
Read the notice
It seems pretty obvious, but the first step in dealing with an IRS notice is to read it. The notice will explain why they’re contacting you and provide instructions on what to do next. See below for most common reasons you’ll hear from the IRS:
- You have a balance due
- You’re due a larger or smaller refund
- They need to verify your identity
- The IRS has questions about your return
- They need more information
- They changed something on your return
If your return was adjusted by the IRS, grab a copy of your original tax return and compare the results. If you agree with their findings, you usually don’t have to contact the IRS. Taxpayers who owe money can just make a payment to clear their debt. Click here to make a payment on the IRS website.
Respond by the deadline
Taxpayers who disagree with the IRS notice or owe money must respond by the deadline. The faster, the better because you’ll minimize penalties and interest. You can either call the IRS using the phone number provided in the upper right-hand corner of the notice or write a letter. Make sure you have a copy of the notice and your tax return handy if you call. If you prefer to plead your case in writing, be sure to include any proof you have that supports your claims. Keep in mind, it usually takes at least 30 days to get a response from the IRS. So, try to be patient.
Pay your balance
If you have a balance due, pay it off as soon as you can. Even if you can’t afford the full amount, at least put something towards it or try to get on a payment plan. Typically, the penalty for failing to pay your tax bill starts at 0.5% of your unpaid taxes each month or portion of the month it’s late. However, it can climb up to 25%. Your balance will also accumulate interest daily. The interest rate is the federal short-term rate plus 3%. Click here to apply for a payment plan with the IRS.
Keep a copy for your records
Once you’re done with the notice, don’t just toss it in the trash. The IRS suggests keeping a copy with the rest of your tax records just in case you need it again later. Wondering how long to keep your old returns? Find out here.
Leave the worries to us
Need an extra piece of mind? When you do your taxes with ezTaxReturn you have the option of purchasing Audit Defense Protection for an additional fee. In the event you’re audited or receive a notice from the IRS, we’ve got your back.