What If I Receive A Notice from The IRS?
If you receive a letter from the IRS or the state saying you owe money:
The three “DO NOT’s”:
1. Do NOT ignore it! Most tax notices are computer generated and only allow a certain amount of time to respond before proposed changes become a an assessment of tax and/or penalties. If it continues to be ignored, the amount due will eventually go to collections where liens, levies and other collection procedures will follow.
2. Do NOT assume that proposed changes or penalties on a tax notice are correct! Often times they are the result of math, administrative, clerical or preparation errors that can be resolved with a simple letter.
3. Do NOT pay the amount due until you verify that the tax notice is correct! When the IRS recalculates a tax, they often do it in ways that favor the government’s interest, not yours. Seek a qualified tax professional to review the tax notice as soon as possible. Timely responses are key to resolving these matters.
Only CPA’s, Enrolled Agents and Attorneys can represent taxpayers before the Internal Revenue Service. At Carri & Pelletier, we can verify the accuracy of the tax notice, protect your taxpayer rights and review your options in responding to the tax notice. We can represent you through the process to resolve the issue and help you get the best possible result. If you have made an error and you owe money, we can ensure that your taxpayer rights are protected through the collection process or help you negotiate a settlement.
Audit and Examination Notices
What to do, and what not to do:
1. Do not panic. Most IRS and state audits are randomly or electronically selected, and not necessarily because you’ve done something wrong. You do have rights as a taxpayer and understanding the process can make a significant difference in the outcome of the audit.
2. Read the audit notice carefully. Most audits are looking at specific schedules or transactions on your tax returns. The audit notice should list the specific documentation the examining agent is looking for.
3. Start gathering and organizing your records. Accurate records are your best defense in an audit, documenting the income and deductions you claimed on your tax returns. If you are missing some original documentation, other means of proving income and expenses can be constructed (such as bank records and credit card statements).
Seek a qualified representative to see you through the audit. At CPM, we can help. Although most audits can be resolved by presenting accurate records, having a CPA, Enrolled Agent or Attorney managing the process and communicating with the IRS for you, someone who understands the tax laws and your taxpayer rights, will increase your opportunity to achieve the best possible outcome, prevent potential abuses of your rights and minimize avenues for expansion of the original audit scope.