Randy J. Elder, CPA, P.C.

Important Steps to follow if you receive an IRS Notice

Most of us don’t want to receive any mail from the IRS or Arizona State Department of Revenue UNLESS it involves a refund check. But this time of year millions of taxpayers are indeed finding a tax related letter in their mailbox. My advice, if you do happen to receive a letter in the mail from the IRS and it isn’t a refund check, don’t panic but proceed with caution.

The first thing to do is make sure the letter is legitimate. Each year, the IRS and state tax departments send millions of legitimate letters covering a range of topics including request for payment, a change to the taxpayers account or a request for additional information.

As I mentioned in a previous post, there are numerous scams with the perpetrators posing as the IRS. While many of these scams come through email, the scammers don’t stop there. They’ll use any means available including phone and snail mail. So always use caution when you receive a communication that appears to be from the IRS or Arizona Department of Revenue. A legitimate letter will typically refer to a very specific issue about your account or tax return. It will also include specific instructions about the steps they want you to take. If you are at all suspicious, please contact this office.

If you believe the letter is legitimate, the next step is to uncover what the specific issue is and what steps are required to resolve the issue. Unfortunately, many of these legitimate communications can become quite lengthy and it can be tempting to put it aside to ‘deal with later’. My advice is to put this at the top of your priority list. If you really don’t have time to review or just don’t want to spend the time, please contact me for help.

If you are certain the letter is legitimate and you have the fortitude to read it through and find that a request for payment is being made, don’t automatically pay the stated amount unless you are 100% certain the amount is correct. It is not that uncommon for taxpayers to receive a letter requesting a payment amount that is actually not correct. Have a professional review and make a determination. A little time upfront will end up saving you time and money in the long run. It can be very difficult and time consuming to try to get a payment back.

Finally, make sure that your account information is kept up to date. If you’ve had any changes in address or contact information, make sure your account with the IRS and Arizona Department of Revenue is up to date. Depending on the timing of your change, waiting to update at the time of submitting your tax return may not be wise. It is always better to make a notification when the change takes effect. That way you won’t forget and won’t miss any important communications related to your taxes. The IRS provides Form 8822 – Change of Address for taxpayers who have relocated between tax filings (8822-B for business change of address). The Arizona Department of Revenue provides Arizona Form 822 and the Business Update Form.

Remember, as I covered in a previous article, that both the IRS and Arizona Department of Revenue have a Taxpayer Bill of Rights entitling you to be informed and pay no more than the correct amount of tax, among other things. If you receive a notice from the IRS, the Taxpayer Bill of Rights publication might actually be included with your notice. You do have rights, even when it comes to paying taxes.

If you have any questions or are unsure about a notice received from either the IRS or Arizona Department of Revenue, please give me a call.