 Internal Revenue Service IRS Tax News. Got a letter or notice from the IRS? Here are the next steps. First, take a deep breath and slowly loosen the stranglehold you have on the mailman's throat. It's not his fault. Then, cordially correspond with the IRS by letter. Perhaps proceeding thusly. Dear IRS, I'm currently seated in the smallest room in my home, your correspondence asking for money before me. Soon, it will be behind me, regards and all that. But first, an attempt at a joke. I'm very particular about what I put in my body these days. You see, I'm making this special meal for my bunny angel. He's a very picky eater and the recipe calls for a cherry on top. I mean, I know a lot of people are like a lot of people won't eat sugar. Sugar ain't my boss no more. Some people won't eat carbs. You scientists say don't eat carbs one day and only eat carbs the next. A lot of people won't even eat meat. I'd like a knuckle sandwich. Sorry, I don't eat meat. But I'm more particular than all of them. So a couple of guys don't rinse out their socks. Pick it, pick it, pick it. For me, I won't even think about putting something in my body. Don't even think about it. They mustn't be disturbed. Unless it tastes good. Eat this pine cone. Eat it. It will amuse me. How is it? How does it taste? It's awful. I know it's a strange criteria these days. Finish it. Eat it. I hate it. Eat it. Swallow it. But I'm a firm believer in it. For me, while eating, I have a saying. If I'm gagging it, I ain't havin' it. It hurts. This is for Lois. Go on. That's my motto. That's what I'm talking about. That's my code. My motto. Thanks for the morning. Modo, okay. IRS tax tip 2022-141 September 14, 2022. When the IRS needs to ask a question about a taxpayer's tax return, notify them about a change to their account or request a payment. The agency often mails a letter or notice to the taxpayer. Getting mail from the IRS is not a cause for panic. It's more like a cause for rage, generally. But it should not be ignored, either. When an IRS letter or notice arrives in the mail, here's what taxpayers should do. Read the letter carefully. So, clearly, you might want to take a look at it. Glance over it a bit. See what the thing has to say. Most IRS letters and notices are about federal tax returns or tax accounts. You're kidding. IRS is asking about taxes. I would never have any case. Each notice deals with a specific issue, include specific instructions on what to do. A notice may reference changes to a taxpayer's account, taxes owed, or a payment request, or a specific issue on a tax return. So, obviously, if you file the tax return, there's an issue with the tax return, possibly. Then the IRS might send you a letter regarding that particular issue if they made any changes. To the account, for example, saying your data doesn't match up to data they got, for example. You might get some kind of correspondence saying, hey, this is the change that we recommend. Do you agree with that change or not based on your information or something like that? Taking timely action could minimize additional interest and penalty charges. So, remember our goal when we deal with the IRS, we want to duck and weave, dance like a butterfly or something like that. So that we don't get hit with the sticks of penalties and interest. That's what we're trying to avoid. So, if you ignore the letter, then it's more likely at some point down the road, you're going to get hit with the stick, metaphorically speaking, of penalties and interest. So, review the information. If a letter is about a change or corrected tax return, the taxpayer should review the information and compare it with the original return. So, if they said, hey, we made a change because something we had doesn't look like a change, something we had doesn't look like what you had. We had a 1099, you didn't include, or we had a different amount on our W-2 than you have. Because remember, all the documents you get, like 1099s, W-2s, that's, you got to remember that that's basically what they're really telling you is not just what to report on your 1040. They're telling you, hey, we gave this information to the IRS, so you better report this information on the tax return because if you don't, the IRS doesn't need any special kind of stuff to figure out that it doesn't match up. It can just be a machine-based, right? They don't even need a person to do the comparison. You're going to get a letter, most likely, if you don't put what's on the W-2 on your tax return. So, the IRS might make the change and say, this is what we have, and we know what it should be because we got this information, possibly, from your employer. Do you agree with our changes? And most likely, you would, in that case, if they line up, but there could be weird situations where it doesn't line up and something is wrong. Possibly, you got a 1099 that was incorrect or something like that, which is very annoying when that happens. But in any case, if the taxpayer agrees, they should make notes about their corrections on their personal copy of the tax return and keep it for their records. So, if you agree with it, it could be fairly easy. You might owe money, but you can say, okay, I agree, IRS, you're right. The things, your changes are good. But then you also want to change the notes on your tax return and inform your tax preparer if you have one so that they reflect those changes on the tax return so that when they roll it forward to the next year, they have the right information, such as the amount of refunds you got in the prior year and if you had any estimated tax payments, for example, or roll over information from one year to the next, you want to make sure that that information is correct or else you're going to get another letter. So typically, a taxpayer will only need to take action or contact the IRS if they don't agree with the information, if the IRS requested additional information or if they have a balance due. So clearly, if you agree, then you could just say, okay, I agree. If you don't agree, then you're going to have to make your case in accordance with the tax law. So you can't just say, I don't agree because I don't like paying taxes. I don't think taxes are right. That's not going to really work under the legal system. But if you say, I don't agree because this doesn't line up with the tax code, that's the basis on which you can make an argument that may actually have some legs to it. Or if you have a balance due, then of course you have to pay them. That's in some way. So take any requested action, including making a payment. So the IRS and authorized private debt collection agencies do send letters by mail. Most of the time, all taxpayers need to do is read the letter carefully and take the appropriate action or submit a payment. I mean, sometimes people whine about this kind of stuff. It's like, all you have to do is like, read it and then give us money. I mean, I don't know what people... What's your problem, taxpayer? Any case. Reply only if instructed to do so. Taxpayers don't need to reply to and notice unless specifically told to do so. There is usually no need to call the IRS. So they're basically subtly saying, please don't call us. Just give us the money. We told you how much money to give us. Just go online and do the electronic transfer. Don't call us. Any case. If a taxpayer does not need to call the IRS, they should use the number in the upper right corner of the notice and have a copy of their tax return and letter. So you don't really want to generally go to the IRS and look for an 800 number to call the IRS because that's probably the worst number to get through. You're probably going to talk to someone who knows basically nothing. You could get the information that they have on your account on IRS.gov. But if you call the number that's actually on the letter, possibly that will direct you somewhere where someone can help you to some degree at least, hopefully. They're going to say, hey, just send us the check. Just send us the check. Any case. Or electronic payment, please. We would prefer electronic payments than a check. But any case. Let the IRS know of a disputed notice. If a taxpayer doesn't agree with the IRS, I disagree IRS. They should mail a letter explaining why they dispute the notice. Now, as you're in dispute, note that they might not take any collection action at that point in time. But you still could be subject to penalties and interests and so on. But when you're in dispute, then usually they're not coming after the collection action during that process. But again, you can't really dispute based on, I don't agree with the law, right? That's not really how it's going to work. You got to say this is what the law is. And I don't think the IRS is in correspondence with the law. I think my position is correct in correspondence with the law if you actually want to win the dispute and not just delay time by disputing. So they should send it to the address on the contact stub included with the notice. So obviously you'll have the return information with the contact stub when you get the letter. The taxpayers should include information and documents for the IRS to review when considering the dispute. So you're going to give them evidence to say this is why I dispute your claims IRS. This is the thing. Keep the letter or notice for their records. So you want to have a copy of the records for your records and then possibly give that copy a year into your tax professional if you have one. Taxpayers should keep notices or letters they receive from the IRS. These include adjustment notices when an action is taken on the taxpayers account. So you might actually have information more and more of these notices hopefully will be reflected if you log into your account on IRS.gov. You would think that would be the case. They're getting better with that online kind of correspondence activities on your accounts. But you want to have a copy of it for a year in tax preparation purposes. Taxpayers should keep records for three years from the date that they filed the return. That's typically the statute of limitations because the IRS could come after your tax returns at any point in that three-year time period and beyond if there's like substantial problems or if they suspect fraud. So you might want to keep them longer than that just so you can make your argument, make your case if they come after you. So I don't just think you could file your tax return just because they haven't questioned it in the next two months. You're never going to hear from them. They got three years, right? Of California I think actually waits almost three years on purpose racking up the penalties and interests and then they hit you with it and say now you owe us this with the penalties and interest because we made a correction, but that's just my speculation. I strongly suspect racking up any case. Watch for scams. The IRS will never contact a taxpayer using social media or text messages. So if you get a social tweet from the IRS saying give us money, that's not how they operate typically at this point at least. So the first contact from the IRS usually comes in the mail. So they're an old-fashioned mail correspondence kind of bureaucracy at this point. They might be changing that in the future and do a little bit more, you know, step out a little bit from, you know, the Pony Express ages of time. But typically the old get the letter by mail and you got to correspond within like 30 to 60 days before they hit you with the penalties and then you'll get another letter if you don't and so on and so forth and that's how it goes. So taxpayers who are unsure whether they owe money to the IRS can view their account information on irs.gov. So more and more your account online irs.gov. I think it's going to be given more and more information. They're getting better hopefully at making that a useful tool like you would think it would be. It is for many other kind of financial types of things like your banks and whatnot. So you would think they're updating that. There's more information you can read about down below understanding your IRS notice or letter. There's a link to that. There's a tax topic 651 notices what to do. Tax topic 653 IRS notices and bills, penalties, interest charges. There's a tax topic 654 understanding your CP 75 or CP 758 notice request for supporting documentation and there's the tax scams consumer alerts link. So there's links to that rating material. You can read up on IRS letters until your hearts content, which you could never get content of this topic because it's so it's so interesting. And there'll be a link to this in the description.