Handling IRS Notices: A Calm Approach to Tax Correspondence

Receiving a letter from the Internal Revenue Service (IRS) can be a moment of anxiety. Even for those with meticulous tax records, the sudden appearance of that official envelope can send a jolt of worry. But here’s the comforting fact: Most IRS notices don’t signal a crisis. They’re routine communications and can almost always be handled calmly and efficiently, especially with the right professional guidance.

Understanding the Purpose of IRS Notices

The IRS issues millions of notices each year, generally falling into just a few categories, which include:

Mismatch Alerts
The most prevalent cause is a mismatch between forms like a 1099 or W-2 and your submitted tax return, triggering an automatic inquiry rather than an accusation of wrongdoing.
Request for Information
Occasionally, further clarity is needed on a figure, or a form may be missing, and small errors might require correction.
Payment Adjustments
Issues such as payments applied to an incorrect tax year, late postings, or discrepancies with reported amounts.
IRS Adjustments
This could involve recalculating refunds or updating credits and deductions.
Identity Verification
As part of enhanced identity-theft measures, the IRS may request verification to confirm that tax filings are legitimate and secure.

Consult Before You Act: Engage a Financial Professional

Acting hastily in response to IRS notices, by either paying amounts or calling the IRS without consulting a professional, often leads to complications. Instead, consult your financial expert to:

Verify the accuracy of the notice and determine any actual liability.
Assess whether IRS errors may have occurred.
Evaluate if the situation is straightforward or requires further representation.
Identify the necessity of any supporting documentation.

The Meaning Behind IRS Notice Codes

Each IRS notice has a specific code that quickly identifies the issue, such as:

CP2000 — Underreported Income
Often due to third-party filing errors.
CP14 — Balance Due
This may depend on timing or reporting discrepancies.
CP75 — Audit Documentation Request
A simple request for verification on credits or deductions.
Letter 5071C — Identity Verification
Fraud prevention measure unrelated to any mistakes.
Notice of Intent to Levy (LT11/CP504)
Prompt action is needed, but panic is not. Professionals resolve these regularly.

Common Missteps to Avoid

To ensure a smooth resolution process, avoid these mishaps:

Ignoring deadlines for notice review and response.
Contacting the IRS before consulting with a tax professional.
Automatically paying any indicated balance without verification.
Sending documents without providing context for their content.
Assuming the notice equates to an audit initiation.

Engage your financial professional first to determine the best course of action tailored to your specific situation. Working together with expert guidance provides clarity and ensures that the path to resolution is as straightforward and stress-free as possible.

IRS Notices: Your Trusted Partner in Resolution

At Tangie R. Cooper CPA Inc., our team is experienced in navigating IRS communications. With over 21 years of professional expertise leading the way, we can help you understand your notice, clarifying its implications and strategizing appropriate responses.

If you've received an IRS letter and are unsure how to proceed, reach out to us without delay. Our commitment is to provide the clarity, support, and resolution you need.

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