You filed your taxes on time and didn’t expect to face any issues. In fact, you were looking forward to putting them out of your mind altogether until the next tax filing season. At NewPoint Law Group, LLP we provide year-round tax support and guidance, but we understand why taxpayers would prefer to think about more appealing topics. In any case, you were expecting at least several months respite from thinking about tax filing duties and obligations. Then it happened. You received a notification from the IRS.
It is important to note that not all letters and notifications from the IRS are necessarily bad. The human mind has a tendency to think in worst-case scenarios, but we should attempt to resist that urge so we can face potential issues rationally and effectively. The truth is the IRS can send out a variety of notices ranging from letting you know that you’ve been selected for a refund, to the fact that the IRS owes you a larger tax return than you calculated. Thus, the first step to dealing with any letter or communication received from the IRS is to keep your cool and read the document or other communication.
Understanding Your IRS Notice or Letter
The IRS typically sends form letters to taxpayers whom they need to contact. There are several form letters and notices, and this fact makes it difficult to provide an exhaustive accounting of all possible notices. However, the letters and notices are typically identified by a code. This code is preceded by the letters ‘CP’ for a notice and ‘LTR’ for a letter, located in the upper right hand corner of the correspondence. Once you have obtained this code, highlight it or write it down. You can then proceed to code look-up pages provided by the IRS. Individual filers should utilize the look-up tool for individual notices and letters. Business tax filers should make use of the corresponding business notices and letters look-up tool. Alternatively, a filer can click on the “view all” button on each page for a comprehensive listing and description of all IRS letters and notices.
From this simple look-up tool you now have a general idea about why the IRS has contacted you. In some cases, you may not have to take any action. In other circumstances, the IRS may state that it has made a correction to your taxes, in which case, you should compare the IRS’s calculations with your own. If you agree with the changes, you may need to make an additional payment to the IRS. You should make this payment as soon as possible to avoid accruing additional penalties and interest on the unpaid tax. If you cannot pay the amount in full, it is a prudent step to investigate IRS payment plans, an offer in compromise, or other options. Finally, if you do not agree with the assessment, you may want to file an appeal through one of the IRS’s appeal program or through the federal courts. An experienced tax lawyer can provide individualized guidance regarding the full extent of your appeal options.
How Do I Avoid Falling for Tax Scams?
Unfortunately, unscrupulous individuals have come to target taxpayers for a broad array of tax scams intended to frighten well-meaning taxpayers into taking hasty action. While the run-up to the tax filing deadline is probably the most common time to encounter a tax scam, false threats of tax audits and other enforcement actions can also follow the tax filing deadline. The good news is, taxpayers who adhere to best practices and follow a few simple rules and guidelines can avoid the vast majority of tax scams.
To start, it is important to note that the IRS will not call you or contact you through Facebook or other forms of social media. Rather, as discussed above, the IRS will contact you through the types of notices and letters. The IRS will also never demand immediate payment or threaten to throw you in jail unless a payment is received by the close of the business day. Taxpayers have rights and are entitled to engage in the appeal process. Any person purporting to be from the IRS who engages in these tactics is almost certainly engaging in a scam.
Work with an Experienced Sacramento Tax Lawyer if You Still Have Questions
If you are unsure about whether something is a scam, it can be effective to work with a tax attorney whom is familiar with the notices and letters the IRS sends out. The tax attorney can help you understand the reason for the letter, whether it is legitimate, and what steps you should take to address and resolve the matter. The Sacramento tax attorneys of the NewPoint Law Group, LLP can provide tax guidance to residents of Sacramento, Folsom, Roseville, and other surrounding areas. To schedule a confidential tax consultation, call 800-358-0305 or contact us online.