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 |  Personal Tax  |  Tax Letters  | 

Received a IRS letter?

Don’t be nervous. Responding to an IRS letter is important, but as long as you handle it carefully and provide the requested information, you’ll be fine.

Why does the IRS issue inquiry letter?

IRS issues more than 200 million letters every year. According to our experience, in most cases, the purpose of a letter issued by the IRS is to ask the taxpayer to explain or verify certain matters on the tax return, which mainly include:

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  • Unreported Income

  • Tax Status

  • Dependents Eligibility

  • Itemized Deductions

  • Eligibility for Tax Deductions, etc.

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Sometimes, some taxpayers may face multiple tax inquiries at the same time, so it may be important to resolve the issues in a specific order.

What do I need to do If I receive a IRS letter?

Here are some suggestions for coping:

 

  • Stay calm: It is very important. Letters from the IRS requesting information or review are a normal procedure and do not mean there is a problem with your tax return, so do not panic or worry. 

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  • Read the letter carefully: Read the IRS letter carefully and make sure you understand the reason and scope of the IRS request or review. Typically the letter will include the purpose of providing the information or review, the documents required and a timetable.

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  • Create a Resolution Plan: After gathering the facts and identifying your tax issue, research possible solutions. For example, if you received an IRS penalty, you may qualify for a First-Time Penalty Abatement.  Choose the option that best fits your situation. If you have multiple issues, address them in the right order and contact the appropriate IRS departments. For instance, complete an audit before discussing payment options for any resulting balance.

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  • Cooperation: Honest communication and good cooperation are very important. Provide required documents and information, answer questions, and maintain communication with the IRS.

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  • Follow the timeline: Provide required documents and information according to the timeline specified in the notice. Delay or refusal to provide information may be used against you.

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  • Screening Appointment: If you have a screening appointment, bring the following items to your appointment (if any):

    • A copy of your IRS review letter

    • Any information and documents requested

    • Copy of tax return for relevant tax year​and copies of the tax returns for the previous two years.

    • Copy of tax return for the most recent year (if the most recent year is not the tax year being reviewed)

    • Any documents you have provided to your tax representative (if any)

    • Documentation of previous tax audit results (if any)

    • Copies of any other IRS correspondence or notices received regarding the tax year

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  • Seek professional help: If you are not sure how to respond to a letter or review from the IRS, you can seek professional advice to ensure your rights are protected.

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  • Provide archived documents: Make sure you provide all relevant archived documents, including tax returns, checks, receipts, and financial records. These documents can be used as evidence to support your tax return.​

Other important matters

Understand Your Rights During an IRS Review: Know your rights, including the right to appeal. If the IRS challenges your tax return—such as disallowing deductions or increasing reported income—you can request a clear explanation based on the facts and tax law.

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After completing an audit, the IRS may propose changes to your return. You’ll receive a report and a 30-day letter giving you 30 days to appeal to the IRS Office of Appeals. If you don’t respond, the IRS will issue a Statutory Notice of Deficiency, after which you can only appeal through U.S. Tax Court.

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Be aware: the letter proposing adjustments often is the 30-day letter. Many taxpayers miss this and lose their right to appeal within the IRS.

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Handling IRS matters requires attention and prompt action. If you have questions or need help, please contact us.

Need help with your taxes?

Whether you've chosen us as your tax representative or used our other services, feel free to Contact Us for support with your tax return.

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