Is This Your Situation....?
"Received A Notice or Letter From The Internal Revenue Service"

First, take a deep breath. Now, make sure to read the notice as soon as possible. Some notices have been sent to inform you that the IRS needs additional information or that you owe money. If you don’t read them, you may miss an easy resolution opportunity, an important deadline or even accrue additional penalties and interest on outstanding tax debts.

What types of correspondence does the IRS send?

Two types, a Notice or Letter and thankfully, IRS Notices and Letters are pretty clear about their purpose and what they want you to do, when action is needed. They also have a handy code in the top or the bottom right-hand corner that you can give to a tax professional assisting you. Notice codes start with CP and Letter codes with LTR, simple enough so far!

Below are the most common examples of a Notice or Letter you may receive...

*You have an installment payment due (CP521),
*You owe money to the IRS (CP504)
*Your refund amount is more or less than you thought (CP134R)
*The IRS received more in taxes and will refund the difference (CP12, CP24E)
*There may be a delay in processing your return (CP44)
*Your return is missing a schedule or form and can’t be processed without it (CP180, CP18)

How to make sure you’re not being scammed or phished...

Be aware that fake letters or notices may be sent by people hoping to get personal information from you. This is called phishing. If something you receive looks suspicious or just doesn’t seem right, we suggest looking for an IRS code and an IRS contact number, which should be in the top right-hand corner of the notice or letter. Still not sure, then reach out to your tax professional.

Next steps...

If you don’t agree with the information supplied, changes to your return, or an amount due in your notice, then you will need to respond to the IRS, and possibly involve a tax professional.

The main thing you shouldn’t do when you have received an IRS letter or notice is ignore it! Ignoring an IRS notice is a best way to cost yourself extra money, among other things. Do yourself a favor and take the actions necessary to resolve the issue before it becomes much more complicated or costly.

Important IRS Communication To-Do’s:...

Pay attention to due dates. Missing a deadline can lead to increased interest and penalty fees and even the loss of your right to appeal an IRS decision.

Call don’t write: Unless you’ve been specifically asked to mail something to the IRS, calling them is a better means of contact. If you write to the IRS, it can take 30 days (about 4 and a half weeks) to receive an answer! Use the number on your notice, if you need to discuss your notice with the IRS. Likewise, use the fax number provided to send any requested information.

Additional IRS notices and what to do if you receive one. Each letter or notice (at least legitimate ones) should have a code in the top or bottom right-hand corner, such as...

CP12
Mistakes corrected; overpayment identified. Compare changes to tax return, update return in your records/contact the IRS within 60 days (about 2 months)
CP501
Balance due. Make payment/Call if you disagree; setup/revise payment agreement
CP502
Second reminder of balance due. Pay as much as possible in order to minimize additional penalties and interest
CP2000
Income or payment information doesn’t match return. Complete response form/follow instructions. Contact provider
CP71C
Reminder of tax, penalty and/or interest owed; also used to explain denial of or revoked passport. Make payment arrangements, speak with a tax debt resolution professional
CP523
Notice of intent to terminate installment agreement and seize assets due to delinquent payments. ay before termination date; contact IRS and possibly a tax debt resolution professional
LTR3172
Notice of federal tax lien filing, your rights to a hearing Request appeals consideration, contact a tax professional Complete form 4089 (Notice of Deficiency/Waiver) and return with payment. Mail additional information. Challenge the increase; consult a tax professional
LTR3219
Notice of Deficiency; the IRS intends to assess a tax deficiency (money due)

If you were to read through the actual IRS regulation you would find over 100 pages of possible Notices and Letters at there disposal. You could do a Google search using a form number but many times it's best to reach out to a tax professional for all the latest guidance and to prepare a response when needed.

In general, the following steps are key to resolving a tax issue with the least amount of headache:

*Read each notice or letter carefully.
*Review your tax return to compare information.
*Respond with one of the appropriate actions ASAP, or at least by the due date.
*Retain the notice or letter for your tax records, for reference, or for professionals who may be
 assisting you
*Remember that you don’t have to deal with this all by yourself

Abacus provides expert Tax Resolution through Enrolled Agents, federally licensed with the Internal Revenue Service for individuals and CPAs capable of working through the financials and tax implications for business clients. Need Assistance? We are as close as your nearest phone....