Received a Tax Notice? Here's What You Need to Avoid

Receiving a letter from the IRS or your state tax authority can trigger anxiety almost instantly. The official seal. The formal language. The dawning realization that something may need your attention.

However, before you react impulsively, take a moment to pause and breathe.

Most of the anxiety surrounding IRS and state tax notifications stems not from the letters themselves but from how rapidly people tend to react without a plan.

Here’s a strategic guide on what to avoid when dealing with a tax notice—and why taking a careful approach can make all the difference.

Avoid Assuming the Worst

Tax agencies dispatch millions of notices annually. Often, these are merely:

Requests for additional information
Automated notifications concerning mismatches
Reminders about missing data
Balance inquiries that don’t yet incorporate recent payments

Receiving a notice is not an indictment. Frequently, it’s an automated request for clarification or correction. Jumping to conclusions only amplifies stress.

Don't Ignore It, Hoping It Will Disappear

Disregarding a notice is a swift route to escalating a minor issue into a major one.

Neglecting these notices can result in:

Missed deadlines for responses
Increased penalties and interest
Fewer options for a satisfactory resolution

This is applicable to both IRS and state agencies. Indeed, some states act more quickly and apply enforcement more rigidly than the IRS when deadlines are overlooked.

Avoid Calling Tax Authorities Without a Clear Plan

This may come as a surprise to many.

Contacting them without a deep understanding of the notice can:

Result in unfounded assumptions
Cause incomplete or inconsistent explanations
Add complexity if the issue is more intricate than it seems

Tax agencies operate strictly by predetermined procedures. An unprepared call can muddle issues rather than resolve them.

Avoid Making Payments to “Resolve” Issues Unquestioned

One prevalent and costly mistake is hastily sending payments.

Paying without understanding the notice may lead to:

Overpayments
Overlooking available credits or adjustments
Missing the chance to dispute erroneous charges

Once payments are processed, correcting errors becomes significantly harder.

Avoid Filing an Amended Return in Panic

Amendments can be counterproductive if done hastily. They:

Require time for processing
May trigger additional reviews
Can introduce new complications if done inaccurately

Amendments should be a calculated decision rather than an emotional reaction.

Not Every Notice Is a DIY Project

While some communications are straightforward, others are more complex. What seems like a minor discrepancy could point to:

Issues in withholding
Reporting inconsistencies
Problems with estimated taxes
Errors from prior years affecting current filings

Attempting a solo resolution can increase pressure, especially with looming deadlines and enforcement timelines.

The Right Approach

A correct response generally begins with:

Carefully reading the notice
Understanding the tax agency’s request
Responding accurately and promptly

Guidance can be invaluable, especially when emotions are involved.

The Bottom Line

Receiving correspondence from the IRS or state tax agencies is unsettling—but it doesn’t need to be paralyzing.

Most issues arise not from the notification itself but from fear, presumptions, or hasty actions.

If you’ve received a tax notice, contact our office before you respond. If you are a current client, involving us early means we can examine the notice, verify what’s required, and help settle the matter with minimal stress.

Important Disclosure

This article is meant for general instructional purposes only and does not serve as legal counsel. Each tax notice is unique, and circumstances vary. For legal advice, consult a qualified attorney. For support in addressing IRS or state tax notices, reach out to your tax professional.

Share this article...

Facebook

Twitter WhatsApp LinkedIn Pinterest Pocket Reddit Email

Want our best tax and accounting tips and insights delivered to your inbox?

I confirm this is a service inquiry and not an advertising message or solicitation. By clicking “Submit”, I acknowledge and agree to the creation of an account and to the and .

Let us take your tax and accounting needs off your hands today.