Taxpayers, it is that time of the year! If you timely filed your 2021 income tax return and there are any clerical or payment issues, you have likely received a notice from the IRS by now.
What to do? Well my best advice, don’t ignore the notice. Open it. Maybe it is not bad news, maybe they are sendng you a refund. My point is, rather than worry about what it could be, open the letter and see what it says.
If you don’t understand what the notice/letter is asking you or telling you, then please please please don’t just set it aside. Call your tax preparer or call me and we will gladly explain the crazy English that the IRS sometimes uses to describe the issue.
If there are clerical errors with your return, take a look and make sure the IRS is correct. They make mistakes. Review the information they list, compare it to your tax return and your own payment records. Then respond to the notice by agreeing with their changes or disputing their changes. Remember, the burden of proof is on you if you are disputing their changes.
For example, a client yesterday received a notice with a penalty for late paying his estimated payments. The IRS claims the payments were made late but my client claims he paid on time. In order to prove that he paid on time, he needs to show proof of mailing – a receipt from the postal service. If he doesnt have any proof of mailing then he will likely have to pay the penalty.
Other notices I have seen recently, a client forgot to include their 1099 for dividends earned in their 2021 tax return so now there is extra tax due. He needs to pay the tax and the interest being assessed but we will be able to get the penalties waived for him as it was an honest mistake and this is the first time he has ever missed a document.
So what does your notice say? How can we help you resolve it? Please don’t ignore letters you receive from any government agency!