Taxes are NOT an emergency
Can you imagine if you just NEVER ate? Like if you said, “I’ll eat soon” but never actually bothered to do it for hours, days, even months?
Taxes are kind of like that. You can put off filing your annual return or paying the tax you owe or responding to a letter, but eventually it will catch up to you somehow.
I was having a conversation with one of my clients this week and we were going over plans to get her shifted from catching up on taxes she owes to being able to make her estimated tax payments in advance. She tossed off a comment about how she just doesn’t want to get another letter from the IRS, and I was hit in the feels by that. I remember when I was a young adult, two of the worst things I could imagine were being sued and being audited. I survived a small claims suit once (over a used sewing machine deal) and that helped take away a little of that fear. Becoming a tax professional and learning more about the audit process has helped take away the fear from receiving the dreaded IRS letter.
If you ever are the recipient of the dreaded letter from the IRS, don’t panic. The worst part (seriously) is slowing down and reading it carefully enough to make sense of what they are telling you. Be sure to read all the pages, not just the numbers.
Check which tax year or period they are writing to you about. That information is at the top of the first page.
Are they asking for more information or telling you about a decision they made?
What is the timeline they give for your response? Most letters have a 30-day or 90-day timeline.
How should you respond? You might need to call in, provide a written response, or upload information. Some of the new letters have a QR code that you can scan with your phone to directly upload information to the IRS representative who is in charge of your case. Sometimes you don’t need to do anything.
Once you have an idea of what is going on you can respond or not as appropriate. Share a copy of your letter (ALL pages) with your tax professional if you need another opinion or help or just think it might be relevant for them to know.
The IRS moves at a glacial pace since most of their communication with taxpayers is through letters. It’s extremely difficult to reach an IRS representative on the phone, so be patient, and don’t panic when you get the letter. There’s always time to figure it out!
Side note:
On the state side, it’s generally easy to talk to someone in the tax department and they are usually so kind and helpful! If you are miraculously able to talk to a real person at the IRS, remember they are trapped in a crappy job. Being super nice goes a long way!
