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Zaher Fallahi, Tax CPA and Attorney; Top 10 Tips to Know if You Get a Letter from the IRS

posted Apr 24, 2015, 10:19 PM by Zaher Fallahi

According to the IRS, they mail millions of notices and letters to taxpayers each year. There are a various reasons why you might receive a notice. Here are the top 10 tips from the IRS to know in case you get one. These tips are modified by me to reflect my experience in assisting our clients: 

1.    Don’t panic. You may be able to take care of it simply by responding to it.

2.    The notice most the time will be about your federal income taxes.  Although, it may be about your business taxes as well.  It may ask you for more information. It could also explain that you owe tax and that you need to pay the amount that is due.

3.    Each notice has specific instructions that should be read carefully. It will guide you what you must do.

4.    You may get a notice that states the IRS has made changes or correction to your income tax return. Review the information and compare it with your income tax return.

5.    If you agree with the notice, you usually don’t need to reply unless it gives you other instructions or you need to make a payment.

6.    If you do not agree with the notice, it’s important for you to respond. You should write a letter to explain why you disagree. Include any information and documents you want the IRS to consider. Always mail your reply along with a copy of the notice so that they would know exactly the purpose of your correspondence, and keep complete copies for your file. Allow at least 30 days for a response.

7.    You won’t need to call the IRS or visit an IRS office for most notices. You call the phone number in the upper right-hand corner of the notice with your questions. Have a copy of your tax return handy when calling the IRS. This will expedite the process and improve your efficiency in dealing with the IRS. Be extra patient, because of the budgetary cuts, you may have to wait on the line for a long period of time

8.    Always keep copies of any notices you receive with your other tax records.

9.    Be alert for tax scams. Generally, the IRS sends letters and notices by mail and it doesn’t call you on the telephone.  Neither does it threaten you by putting you in Jail. Once an IRS collection officer had called and threatened to put him in Jail. I asked the agent to see me in person and reminded him of the law and that he cannot legally conduct himself in that manner. The IRS does not contact people by email or social media to ask for personal or financial information.

10.    For more on this topic visit IRS.gov. Click on the link ‘Responding to a Notice’ at the bottom left of the home page. Also, see Publication 594, The IRS Collection Process. You can get it on IRS.gov/forms at any time.

Note: If you believe there is a slight chance of criminal implications, you may consult a tax attorney before responding to the IRS notice. Nowadays, clients are getting letters with respect to items such a Report of Foreign Bank and Financial Accounts (FBAR), Foreign Account Tax Complianc Act (FATCA), etc. These may have legal significance and you are advised to have a legal counsel.

Zaher Fallahi, Tax CPA , Tax Attorney, assists clients including Americans living abroad with  tax preparation, tax planning, IRS representation, disclosing undeclared foreign bank accounts (offshore voluntary disclosure program, OVDP), report of foreign bank & financial accounts (FBAR, Foreign Account Tax Compliance Act (FATCA), Telephones:  (310) 719-1040 (Los Angeles), ( 714) 546-4272 (Orange County) or e-mail:  taxattorney@zfcpa.com

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