What Do I Do With My IRS Letter?
If you’ve received an IRS letter and you’re sure it’s for real, don’t ignore it. Procrastinating could turn a minor issue into a more serious problem.
If there is a specific action the IRS wants you to take, there will be clear directions. You may not have to take any action, however, such as when the IRS is letting you know of a change to your tax return, and you don’t want to contest the change.
Here are some specific do’s and don’ts to keep in mind if you receive a letter from the IRS:
Don’t freak out. Every year, the IRS sends millions of letters to taxpayers, many about subjects other than an audit. Just take a deep breath, read the letter over, and see what it wants you to do.
Don’t procrastinate on responding. Sometimes the issue is a simple one to deal with. But the longer you wait to respond, the more interest charges and penalty fees you may face—depending on what the issue is.
Don’t wait to take action as requested by your IRS letter. The sooner you deal with it, the quicker you’ll be able to put the issue behind you.
Do be thorough. If the IRS is sending you a notice about a change it has made to your tax return, don’t just take their word for it. Compare the change they made to what was originally in your tax return. You can dispute if you feel the IRS is wrong.
Do dispute the letter if you have a reason to. The IRS may have made a change or correction to your tax return, or decided you owe more money. If you agree and don’t want to make a dispute, that’s great—but don’t hold back if you don’t agree.
The system is set up to allow disputes. You can reply to the IRS by mail, explaining your dispute and providing additional documentation. The letter should provide clear instructions for disputes if needed.
Don’t get taken in by scams. IRS scams are unfortunately fairly common—including scams by mail.
These often take the form of letters demanding immediate payment, and threatening arrest if you don’t comply. The letter may instruct you to make a payment by phone, often by a specific method—such as prepaid debit card.
Some IRS scam letters incorporate information about the target’s actual outstanding tax debt—which can be especially unsettling. But be aware that some tax information, such as existing liens, may be publicly available.
If you get a letter in the mail from the IRS, examine it carefully and make sure it’s not a scam. Call the IRS and check if you’re in doubt.