There are plenty of people you would love to get mail from: your parents, a loved one on a business trip, your Spanish pen pal from Mallorca, your current crush even. But receiving mail from the IRS? Much less exciting. In fact, for many people, it’s incredibly stressful. They believe it foreshadows some sort of personal financial collapse, one which their emergency fund won’t save them from.
Thankfully, this is rarely the case. If the IRS contacts you, follow these simple steps:
- Don’t panic
- Don’t ignore the notice
- Read slowly and carefully
- Respond promptly
- Don’t throw the notice away
For many people, their natural response to receiving a notice from the IRS is to panic. Their mind begins to race, and they start thinking about all of the possible mistakes that they made when filing (or forgetting to file) their returns. However, just because the IRS has reached out to you does not necessarily mean that you made some sort of mistake, or even that you owe additional money.
It’s also possible the IRS is contacting you because they owe you money, require some additional information on your tax return, or made some sort of change to your return that they want to inform you of. You’ll never know until you open the notice, so take a deep breath and proceed calmly.
Don’t Ignore the Notice
It might be tempting, once you’ve received a notice from the IRS, to let the letter sit there in the slush pile of unopened letters by your door. This is never a good idea. While it’s totally okay to ignore all of the unsolicited advertising you receive from realtors and delivery services, a notice from the IRS should always be opened promptly.
Read Slowly and Carefully
Because the IRS is a government organization, the language contained within the notice might be dense, unnecessarily complicated, and hard to read. It might take a few minutes to fully grasp what they are contacting you about. However, the notice will be thorough, and will contain all of the information you need to take further steps.
- The right-hand corner: In the upper right-hand corner of every IRS notice you will find a phone number. If you call that number and give them the unique code that comes with every IRS notice, you will be able to speak with a representative that can help walk you through the details of the notice. Before you call, make sure that you have your tax return on hand.
- If you don’t want to call: If you don’t want to speak with a representative or lack the means to call, you can always visit the IRS website. There, you can use the unique number that comes with your notice to find out more about why it was mailed to you and what is required of you. If you want even more help with these steps, you can contact an IRS tax advocate to guide you through the process.
The longer you wait to respond to the notice, the less time you will have to complete any actions that are required of you. If procrastination is the reason you received a notice to begin with, now would be a great time to break the habit.
Included with every IRS notice is a mandatory response date. Depending on the nature of the request, they may give you a generous buffer period. However, if you fail to respond in time you will likely be subject to frustrating and financially debilitating penalties. They can go as far as to place a lien on your property, assets, and can garnish your wages.
Don’t Throw Away the Notice
Once you’ve addressed the concerns laid out in the notice, you might be tempted to throw it away. However, you never know when you will need to prove that you were contacted by the IRS, or if the notice will eventually become important to your business’ tax records.
A Final Note
It’s worth restating that you should never, ever ignore a notice from the IRS. They may ask you to furnish additional clerical information, or to clarify a statement you made. While these requests may seem irrelevant, ignoring them will only turn a non-issue into a real problem, one that may entail some sort of financial penalty. Take a deep breath, read carefully, and respond promptly.