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How should I respond to an IRS notice or letter?

Article ID: 104
Last updated: 02 Jan, 2013
Revision: 4
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By Jason Watson ()

Quickly.  Do not blow these off or think you can beg for forgiveness after a deadline has passed.  The IRS can be compassionate (really!), and will typically extend all deadlines only if you contact them and explain your situation.

To the IRS’s credit, they provide very detailed list of options and steps to take for each option.  Follow the instructions closely.  You can always have us look at it for you as well.

Here are some general rules in responding to the IRS-

Be Prompt: As mentioned before, timely responses are essential.  While the IRS gives you generally 30 days to respond to initial notices, if you wait to the very last minute to send in your documentation there is a good chance that correspondence will get crossed in the mail.  Make this is a priority.

Send 100%: When you mail or fax information to the IRS, ensure that you have completely responded to the entire letter or notice.  Do not send some information today while you gather up other information later.  If you send two partial responses to the IRS, the chances of the same processor getting both pieces of your tax puzzle are very low.  Request an extension for your response.  Be patient, yet punctual, and send everything required at once.  Fax or mail, pick one.  If mailing documents, use a certified mail service.

Send Copies: Never ever send originals.  The IRS might lose your documentation, and they certainly won’t mail it back.

Don’t Overshare: Only send what is asked for.  Don’t overshare with the IRS but at the same time don’t send a riddle.  If you make the processing agent’s job a little bit easier, they might make your life a little bit easier.  When they ask for your favorite color, don’t respond with pizza.

Fax: When you fax your information, write your name, social security number and tax year on the bottom of each page.

If you’ve been examined for the same item in the preceding two tax years and both audits resulted in a no change result, you can notify the IRS of this fact and that particular element of your impending audit will be removed.

If you are filing bankruptcy or have already filed for bankruptcy, then you are required to inform the IRS.  Things such as collections, liens and levies have new rules once the taxpayer has filed for bankruptcy.

The IRS can also contact other people such as a neighbor, bank, employer or employees.

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What is the period of limitations for an audit?     What are some of the types of IRS notices and letters?