How To Answer IRS Letters

Have you received some type of letter or notice from the Internal Revenue Service? If so, it can be scary and often downright intimidating. But rest assured that you're in good company. Every year the IRS mails millions of letters and notices to taxpayers but that doesn't mean you need to worry.

Here are eight things you should know about these IRS notices, just in case one shows up in your mailbox.

1. Don't panic. Many of these letters can be dealt with simply and painlessly.

2. There are number of reasons why IRS sends notices to taxpayers. It may request payment of taxes or notify you of a change to your account or request additional information. Typically, the notice you receive deals with a very specific issue related to your account or tax return.

3. Each letter and notice offers specific instructions on what you need to do to respond to the inquiry.

4. If you receive a correction notice informing you that IRS thinks you may have made a mistake in your tax return, you should review the correspondence and compare it with the information on your return.

5. If you agree with the correction to your account, usually no reply is necessary unless a payment is due.

6. If you do not agree with the correction that IRS made, it is important that you respond as requested.

a. Write to explain why you disagree.

b. Include any documents and information you want IRS to review along with the bottom tear-off portion of the notice.

c. Mail the information to the IRS address shown in the upper left-hand corner of the notice.

d. Allow at least 30 days for a response.

7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right-hand corner of the notice. Have a copy of your tax return and the letter available when you call so that the IRS service representative can more efficiently respond to your inquiry.

8. It's important that you keep copies of any correspondence with your records.

For more discussion about IRS notices and bills, you might find the following resources helpful:

Publication 594 explains the IRS Collection Process. Publication 17 helps you understand how and why IRS charges you penalties and interest. It also is a general handbook about federal income tax for individuals. Both publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

As always, consult with your tax adviser to make sure that you are keeping the records you need to prove the income you've earned and the deductions you've taken in your tax return.

About the Author

Charlie Seitz has prepared over 10,000 tax returns at latest count. His ezine, Terrific Tax Tips, gives taxpayers tools they need to intelligently reduce the taxes they pay. He also provides online tax preparation software for people who do their own taxes. All of the profit from Taxpert Online is donated to organizations that feed children.

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