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What to do when you get a letter from the IRS

By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley, LLP

We’ve heard more than one report of people getting called by scammers pretending to be the IRS, wanting money for back taxes or claiming that the IRS is going to IRS doorwaysue you. Make no mistake: the IRS will not call you.

This time of year, as many people are working on tax filings, anticipating returns and otherwise crunching numbers, the IRS is top of mind, and the scammers know it.

Your first contact with the IRS will be in the form of a letter, and chances are, it won’t be anything to worry about, but it does demand your attention. Always treat a contact from the IRS with a sense of urgency, but there’s no need to panic.

Here’s why the IRS might contact you:

  • Simply that your return was selected for random audit.  The IRS does this as part of its compliance program.  There is nothing you need to do.  You will be notified via a letter when the IRS is finished and what, if any, changes it claims need to be made to your return.  Of course, many audits result in a “no change” audit.
  • More detail needed about a large charitable donation you’re claiming. The IRS may ask for what is known as “substantiation” of the donation.
  • A math error in your return. If something doesn’t quite add up, the IRS has the power to unilaterally make an adjustment to your return if the error amounts to a “clerical” error.  You will be notified of the change.
  • A reporting error by a third party. Actually the reporting may be correct and you inadvertently didn’t report it on your return. This situation most commonly arises when an entity such as a bank reports income to you via a 1099.
  • A question about your claim for a home office deduction or the mileage you’re claiming.
  • Investment income and loss documentation.
  • You owe back taxes. You may need to dig up past year’s returns and figure out why the IRS is claiming this.

Most of the time when you hear from the IRS, you can simply answer the questions by mail and that’s all that’s required, and you won’t hear back again.  The most important thing to remember to do is respond when asked to do so.  The more responsive you are to IRS inquiries that request a response, the more quickly and accurately your tax issues will be resolved.

You may need professional help, though, if the IRS is claiming you owe back taxes, or more taxes than you believe you do, or if they open a full-scale audit of your return. An attorney can help you dispute a claim from the IRS that you owe taxes. Contact me, Nathan Vinson, if you need help from an attorney. You can reach me at (270) 781-6500 or nvinson@elpolaw.com.