Understanding the Most Common IRS Notices

If there is an issue with your federal income taxes, the IRS, in most cases, will send you or your designated representative a written IRS notice through the United States Postal Service (USPS). That IRS notice will outline the issue at hand and let you know what actions you may need to take to resolve the matter.

The Most Common IRS Notices

The IRS has dozens of different types of notices it may send to you or your tax preparer when there are questions or concerns about your tax return. The most common notices, however, involve:

  • Notification that there is a balance due on your taxes for the year.
  • Notification that you are due a larger or smaller tax refund than initially calculated.
  • Notification that the IRS made changes to your return due to a miscalculation or error.
  • Notification that the agency requires more documentation to verify your identity or to process your tax return.
  • Notification there has been a delay in processing your return.
  • Notification that the agency may have questions about your return.

If you or your representative receive one of these notices from the IRS, or a different one, don’t panic. The most important thing you can do is read the notice carefully. Not only will it outline the issue at hand – it will provide instructions on what to do next.

Taking Action on Your Notice

The IRS has published instructions about next steps if you receive a notice. They note that every notice includes specific instructions about what to do if you’ve received the communication. This is important as failing to comply with those steps could lead to additional interest or penalties.

The first and most important step is to review all the information to verify its accuracy by comparing it to the original tax return. If the notice is correct, they will then outline any requested actions you should take. They might include sending in additional documentation or making a payment.

If you are disputing the issue raised in the notice, the next step is to write a letter to the IRS using the included contact address. The letter should clearly outline why you disagree with the issue and include all relevant information and accompanying documents. That will help the IRS consider the matter – and determine the most appropriate course of action moving forward.

Undoubtedly, receiving a notice from the IRS can be stressful – even when it is a common one. If you have received an IRS notice and are unsure what to do next, don’t hesitate to ask for help. Reach out to the Highland Tax Group to better understand the issue and how to resolve it best.