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EIGHT IRS TIPS FOR TAXPAYERS WHO RECEIVE AN IRS NOTICE

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By Amber Kocher, CPA Manager

Blue's Tax Advisors assist nonprofit clients with IRS notices and letters throughout the year, every year. There are many reasons for the IRS to send a notice or letter See IRS Notice Reasons Here. According to the IRS, it sends millions of letters and notices to taxpayers every year. To help alleviate your stress the IRS has published eight tips to consider:

  1. Don't panic. Many of these letters can be dealt with simply and painlessly. What should you do? Email, fax, or mail a copy of the complete letter to your tax advisor. S/he will review the notice and let you know what needs to happen next.
  2. There are a number of reasons the IRS sends notices to taxpayers. The notice may request payment of taxes, notify you of a change to your account or request additional information. The notice you receive normally covers a very specific issue about your account or tax return. What can your tax advisor do? Your tax advisor will be able to explain to you what the notice means and what the IRS is asking for in the notice.
  3. Each letter and notice offers specific instructions on what you need to do to satisfy the inquiry. How can your tax advisor assist? In most cases your tax advisor will be able to let you know what type of assistance s/he can provide to help you resolve the issue.
  4. If you receive a correction notice, you should review the correspondence and compare it with the information on your return. Can your tax advisor review? Your tax advisor can help review this information for you or with you. If your tax advisor prepared the organization's return, they will have the tax return information handy for comparison.
  5. If you agree with the correction to your account, usually no reply is necessary unless a payment is due. Can your tax advisor help? Your tax advisor can help talk with you about the necessary steps and assist you in determining when and where to submit any payments. A correction or payment will normally apply to a return where taxes are due such as the Form 990-T, Exempt Organization Business Income Tax Return or an excise tax is required such as the Form 4270.
  6. If you do not agree with the correction the IRS made, it is important that you respond as requested. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the lower left part of the notice. Allow at least 30 days for a response. How can your tax advisor help? Your tax advisor will be able to help determine the best plan of action based on the IRS's requested correspondence. You will want to make sure to send a complete copy of the IRS notice in order for your tax advisor to be able to respond with all of the required information in the correct amount of time.
  7. Most correspondence can be handled without calling or visiting an IRS office. However, if you have questions, call the telephone number in the upper right corner of the notice. Have a copy of your tax return and the correspondence available when you call. What should you do? Your tax advisor can call on your behalf. However, before s/he can call and inquire, the officer of the organization will need to sign a Form 2848, Power of Attorney and Declaration of Representative. Your advisor will fax this form to the IRS allowing him/her to speak on the organization's behalf.
  8. It is important to keep copies of any correspondence with your records. What will I receive from my tax advisor? Typically, your tax advisor will provide you with copies of all correspondence made on your organization's behalf for your records (via email or mail whichever is preferred).

For more information or assistance with tax notices contact your Blue Tax Advisor.

 

If you have any questions regarding the article above or any other issue affecting your not-for-profit organization please contact your Blue & Co. advisor or e-mail us at blue@blueandco.com or call us at 800-717-BLUE

 

Please visit our website at http://www.blueandco.com for more information regarding the services we provide.

CIRCULAR 230 DISCLOSURE: To ensure compliance with recently-enacted U.S. Treasury Department Regulations, we are now required to advise you that, unless otherwise expressly indicated, any federal tax advice contained in this communication, including any attachments, is not intended or written by us to be used, and cannot be used, by anyone for the purpose of avoiding federal tax penalties that may be imposed by the federal government or for promoting, marketing or recommending to another party any tax-related matters addressed herein.


 

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