The IRS alone sends millions of notices to taxpayers every year. When the IRS – or a state taxing agency – needs to contact a taxpayer, they typically send a letter to the last known address via the US Postal Service.
The IRS does not initiate contact with taxpayers via email, text message, or social media. In rare circumstances, an IRS Revenue Officer may call or physically visit a taxpayer before mailing a notice, but this is the exception rather than the rule. It is important to know IRS representatives all carry a government identification card to verify their authorization.
Scammers use sophisticated methods to make their contact look and feel like it is legitimate. There are a few things scammers typically do that are not part of the IRS’s process that can help someone determine if the notice is legitimate. The IRS does not demand immediate payment, so if during the first contact they are requesting payment or a specific type of payment, such as prepaid debit card, gift card, or by wire, be wary. Also, the IRS will only request payment be made to ‘United States Treasury, so if you have a different payee, this is a red flag.
You are always given an opportunity to respond to the notice and provide additional information to help resolve the matter in the notice. Also, the IRS does not threaten to bring local police, immigration officers, or other law enforcement agencies to arrest people for not paying taxes.
Now that we’ve covered the scams, let’s discuss what to do If you receive a notice. Don’t panic – notices are typically issued for discrepancies on the return that often revolve around resolving the differences between a number from a third-party provider, like a bank, and the number on the actual return.
Most notices can be resolved with one response by sending additional information to the IRS. Take time to read the notice and understand what it is about. The notice will often specify additional information and a due date to send a response. Don’t ignore the notice and hope it goes away, because the IRS will continue to contact you and has the authority to levy bank accounts or garnish wages if they believe you owe additional taxes and you do not provide the information to prove otherwise.
If you agree with the notice and the changes included, then you can sign the notice to confirm your agreement and send payment and be done. If you disagree, the notice will give you a specific date when you need to respond to have additional information considered that may change the assessment in the notice. You should prepare a written response to explain why you disagree and include any information and documents you want the IRS to consider. You can expect a reply to your response but plan to wait at least 30 days for a response.
You have the right to have someone else, such as a CPA, Enrolled Agent or attorney represent you and discuss the notice on their behalf with the taxing agency. This will require a signed Power of Attorney Form where you authorize the IRS to communicate with the representative on your behalf.
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