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I Just Got a Tax Notice! Now What?

August 14th, 2017 | Written by


Opening your mail and seeing a letter from the IRS or the state can be frightening.   Before you panic and send off a check to the IRS, take a breath, read the notice. Do you understand what it says?  If not, please reach out to someone who can help you.  If you had the return professionally prepared that person should be your first call.

Tax notices can be caused by many things.  It could be that something was sent to the IRS that they can’t find on your return or you are missing some required information. The following are examples:

  • Missing tax documents, W-2 from a part-time job, or the sale of stock that you know was not income
  • Perhaps your deductions are out of the normal spending pattern for similar job classifications
  • Maybe you forgot to document your charitable contributions
  • No copy of the out-of-state return related to a state credit
  • Health care is not adequately documented and subject to rejection notices
  • Estimated tax payments are incorrect

Be aware that tax notices are taking the place of full scale audits and are increasing in numbers as the ability to match your tax documents to your returns increases.

Before you react, securely send a copy of your notice to your tax preparer. They will compare the income and deductions on the notice with the return they filed for you.  If you did your own return, this would be your first step.  Most of the time, providing additional documentation via letter or fax can quickly correct the problem.

If you find that the notice is correct, you forgot to include a W-2 or a stock sale, your tax preparer will gather that information and add it to your original filing to see if the calculated amount is correct.  Only then should you make a decision to pay the notice or amend the return.

Penalty and interest calculations are complex and can also benefit from a review by your tax preparer.  There are cases where abatement of the penalty can be requested and is often accepted.

If you have received a notice from the IRS or if you have any other questions, feel free to reach out to me at [email protected].


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    This information is not intended to be used as the only bases for investment decisions, nor should it be constructed as advice designed to meet your particular needs. You are advised to seek the advice of your financial advisor prior to making any decision based on any specific information contained herein.
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