Whether you have just received a mail from the IRS or a notice from a State Tax Agency, do not panic. You are nowhere near litigation or even penalties, just yet. However, you should not just ignore them or throw them away, either. Read the letter carefully and take the following steps:
• Take timely actions
Normally, the letter or notice contains a due date by which the taxpayer/recipient is required to file a return, make a payment or respond to the agency. Please carefully the review the letter. An action should be made before the due date in order to show good faith and avoid late fees or penalties.
• Avoid calling the agencies
Calling the agencies can be frustrating and time-consuming as many of these tax agencies are understaffed and overwhelmed. One needs to jump through many hoops in order to speak to a real person, instead of a machine. Sometimes, the employees on the phone are not well-trained tax experts and may not solve the issue during the phone call. Unless you have a designated number in your mail and are specifically required to call that number, calling the tax agencies is not an efficient or effective way to handle the issue.
• Gather Evidence Supporting Your Stance
If you have documents, pictures and letters that support your claim, you should gather them and organize them. You should also make it a habit to keep records of your receipts and bank transfers. You never know when you will need them.
• Do avoid scams.
Some tax agencies, such the IRS, will never contact a taxpayer using social media or text message. Be extra careful if the notice or message appears to be fishy.
How can a professional help?
If you feel like you are overwhelmed by the complexity of the issue and would like to mitigate your penalties with professional assistance, you can contact an enrolled agent, a certified public accountant (CPA), or a tax attorney. Although all of them can represent you in front of the IRS, the benefits of speaking to a tax attorney include that a tax attorney can continue to represent you in the tax court or a civil court and that your communication with a tax attorney will be protected by attorney-client privilege. In addition, a tax attorney can help you draft your argument and compile your evidence in a persuasive way and from a legal perspective. If you just received a mail or notice from tax agencies and would like to receive professional assistance, we’d like to hear from you.