We’re way into August and okay just when you think you're done with taxes, you get a notice!
Well if this has happened to you, just know that you're not the first and you won't be the last. My best way to describe tax notices is the IRS asking questions about something you’ve said, or maybe forgotten to say. (Yes, they are actually listening).
1. MAKE SURE IT’S YOUR NOTICE AND IDENTIFY WHAT YEAR
First thing you want to do is make sure it to your notice. This may seem a bit obvious, but in this age of paper mail being delivered to wrong addresses you'd be surprised. Notice the tax year that will tell you what year they're questioning. That helps you focus your energy on gathering the right folder to find any discrepancies. Unfortunately, it can take a few years for IRS to catch up with you with questions that you may have to provide documentation for, so be sure and keep your records at least 3 years, if not a few more just to be safe.
2. IDENTIFY THE AMOUNT YOU’RE BEING ASSESSED
After you've done the preliminaries now it's time to get into the meat of the notice, starting with the first section, which is pretty much a summary, that includes any actual tax owed, any payments toward that tax, next interest and penalties, if any, the total amount due and when it is due.
If it’s the first notice, there’s a good chance that IRS is just “proposing” additional tax. If so, it will will actually say that and the amount due in bold letters, and then include the summary tax, interest, new amount and due date.
3. FIND OUT WHAT IRS WANTS YOU TO DO NEXT AND BY WHAT DATE
Next section actually appears before they’ve provided the details. It’s still helpful to know this though in case you’re tempted to put the notice down and forget about it
There's typically a phone number to call, which will usually get your call answered more quickly. Always have your notice available because they will ask you this information to provide answers.
You may also see what to do if you agree with the change, what to do if you disagree with the change, and then what IRS will do if they don't hear from you. Scary language indeed!