If you notice a letter from the IRS in your mailbox, you may immediately feel uneasy. However, there is no need to panic. The IRS sends out millions of letters to taxpayers every single year—and most of them are simple requests or notices.
A letter from the IRS does not necessarily mean you are in trouble. Still, it never hurts to consult an experienced California tax attorney if you have any questions or concerns about a letter you have received from the IRS.
The IRS sends out notices and letters for several reasons, including the following:
There Are Delays in Processing a Tax Return
There are several reasons why a tax return may be delayed. Incorrect information provided on taxes, inaccurate direct deposit information, filing a tax return late (or even early!), and issues with social security numbers have all caused delays in processing tax returns in the past.
The IRS Needs Additional Information from The Taxpayer
To finalize a tax return, sometimes the IRS needs more detail from the taxpayer. Or, in some cases, the taxpayer has inadvertently forgotten to include a form, such as a W2. The IRS will send a request for this information to the taxpayer.
The IRS Needs to Verify the Taxpayer’s Identity
In some cases, the IRS simply needs more details from the taxpayer to ensure the IRS has proper identifying information. The IRS provides a phone number in this letter for the taxpayer to call. The taxpayer will need to have the following items handy to verify his or her identity:
- The current letter from the IRS
- A previous tax return
- The tax return the notice corresponds to
- Supporting documents for these tax returns
Once the IRS has this information from you, your return will continue to be processed.
The Taxpayer’s Return Has Been Changed
Taxpayers who receive this notice may have miscalculated something on their tax return. Taxpayers should carefully review their calculations to see if an error was made. If not, the taxpayer may need to provide additional information to the IRS.
The Taxpayer Has a Balance Due
After completing the tax return, the IRS has determined that the taxpayer owes money to the IRS. To avoid penalties, the taxpayer should pay the balance due as quickly as possible. If the taxpayer cannot pay the entire amount owed, a payment plan may be set up with the IRS.
The IRS Has a Question About the Taxpayer’s Tax Return
For one reason or another, the IRS needs to clarify some information on the taxpayer’s return. The IRS may need the taxpayer to send in additional information or clarify statements on the tax return. Supporting documentation may be necessary.
The Taxpayer is Owed a Smaller or Larger Return
In some cases, the IRS recalculates your refund and realizes that your return is either smaller or larger than you thought it would be. The IRS may send you a bill for the difference that you owe or you may receive a larger check from the IRS than you anticipated.
How Do I Know My Letter or Notice is Real?
It is no secret that there are many scam artists who pose as employees of the IRS to convince taxpayers to send them money. If you receive a notice from the IRS, how do you know it is legitimate?
First, the IRS has stated that it only sends notices by mail—not by electronic mail or social media. If you receive a “notice” from the IRS in your email or on a social media page, it is a scam.
Some scammers may also call a taxpayer and demand payment in the form of a gift card or wire transfer. These scams are especially popular in the summertime, since many taxpayers are waiting on their refunds at this point. The IRS generally will not call taxpayers without sending a letter first, and it certainly will not request payment in the form of a gift card or wire transfer.
Of course, some scammers may send fake letters to taxpayers that look a lot like the ones that come from the IRS. If you have any concerns about these letters, you may always consult a San Diego tax attorney to assist you.
If You Have a Tax-Related Question, We Can Help
At RJS Law, our San Diego tax attorneys have provided excellent legal services to our clients over the years. If you would like to schedule a free consultation to discuss your tax concerns, contact us today.