Since March 2020, life has certainly changed for all of us and life at the Internal Revenue Service is no exception. With four tax legislative changes, the issuing of three separate rounds of stimulus checks, and out-of-date technology, who wouldn’t be a little behind? Unfortunately for taxpayers, this service lag can cause some big headaches. Below are a few tips to keep in mind if you get that “love mail” from the IRS or from a state tax agency.
- Don’t panic! In many cases, a notice from the IRS is just the beginning of negotiations. Many notices are automatically generated by the IRS computers and upon examination can be easily resolved. For all notices, there are defined time limits that give taxpayers the opportunity to respond. There are generally also a few stages or levels of notices that go out before any official action is taken.
- Don’t ignore the notices. Timely response to notices helps not only resolve the issue sooner, but it also informs the service that you are on top of the situation. Be sure to send a copy of any notice you receive to our office immediately so that we can help you handle the response if needed and also so that we have a copy of the notice. Sometimes these notices can inform us of changes (such as change in overpayments applied to the next year) that will help ensure the accuracy of future returns.
- The IRS will never make its first attempt to contact you by telephone, e-mail, or text. Do not give out your Social Security Number, Federal Employer Identification number, bank information or other sensitive information to a caller from the IRS unless you have previously received letters from the agency. There are numerous scams that involve someone pretending to be an IRS agent to get your information.
- File your returns and payments electronically whenever possible. Electronic filing gives you an electronic postmark with the taxing agencies and is usually faster and more accurate than paper filings. Electronic filing also prevents keying errors that are frequently made when returns are processed manually.
- When mailing returns or payments, use certified mail with return receipt. The IRS has strict rules on what serves as adequate evidence that you have filed a return or payment in a timely manner. Especially in the last couple of years, we have seen many payments and returns get lost in the delivery system or at the processing center, but with a certified mail receipt, you will have the evidence you need to prove that you sent the information on time. This can prevent costly penalties and interest.
Kelley Manders, CPA, is a Senior Manager with our Business and Tax Advisory Group. She can be reached at firstname.lastname@example.org.