Have you ever received a letter from the IRS? If you have, you know the dread that comes as you start opening the envelope. You don’t want to, but you must proceed. If you haven’t yet received a communication from the IRS, you will. At least, you will if you are registered as a tax-paying entity! If you aren’t, and you are conducting business, we should chat.
So, when that letter comes, take a look at the IRS tips and check out my recommendations from experience:
- Remember that the IRS sends letters for EVERYTHING. If you have an address change, a status change, an overpayment, or any discrepancy in your reporting, the IRS will send a letter. The IRS does not initially communicate through phone calls or email. If you receive a phone call or email from someone claiming to be with the IRS, it is a scam…do NOT provide any information to them. If the IRS really needs something from you, they will mail it to you.
I have one caveat to this as there may be an occasion where you may initiate a conversation through a phone call or email with a local agent, and these cases may produce a phone call or email from that agent. An agent will always provide their number and credentials in these cases, and you should have record that the individual is legitimate.
- Whenever you send anything to the IRS (estimated tax payments, quarterly reports, employment reports, federal tax returns, etc) make sure you send the documents Certified Mail® through the USPS. This will provide you with a tracking number so you can track when your documents are received. Before you package up your documents, make a copy of any forms and signature pages, scan it for your records. After you send your documents and have your Certified Mail® receipt and tracking number, make sure you scan that too. Save the evidence of mailing along with your document that you sent. I like to write the form name and period on the certified receipt, so it is clear what was mailed and when. This is helpful if you ever have the IRS try to claim that they did not receive a report (or that it was filed late). You can prove you sent the form and show the date it was sent.
- When you receive something in the mail from the IRS, make sure you read the whole communication – front and back. If there is anything that is not clear, you can call the IRS and discuss it with an agent. However, you must be the approved contact with the IRS. If you are a sole proprietor or a single-member LLC, you will be the only contact and can speak with the IRS. There will be a phone number provided on your letter. Be prepared to be on hold for 1-2 hours – great time for multi-tasking! Maybe read some blogs.
- If you ever need to communicate by writing a letter to the IRS, make sure you always include the following pieces of information in your letter:
- Company Name
- Notice/Letter number of the letter you received from the IRS
- Tax period in question (i.e. quarter ending 6/30/17)
- Your Tax ID number (EIN or SSN)
- CAF number if you have been issued one
- Form number in question (i.e. 941 or 1040)
- Detailed description of what you need to communicate
- Your signature, name, and date
Remember, don’t worry too much about letters from the IRS. The best thing you can do is to be responsive to letters and take action. The IRS can be more forgiving if you are working within the system and trying to resolve things. They can extend deadlines and remove interest penalties if they know you are actively working towards resolution.
If you receive a letter from the IRS and needs some help, contact your tax professional today! If you don’t have a tax professional, we can refer one or two to you!