Over the last several weeks we have received word that many investors have received a letter from the IRS, in all cases asking for clarification and additional tax payments.
Here are a few items to remember when, inevitably, you receive such a notice:
- Do not panic, in most cases we find the IRS to be friendly, and such notices are usually a request for more information, along with additional tax dollars.
- If you do not understand the IRS question, call your tax professional, you may need professional help.
- Do not ignore the request for information, no answer is unacceptable, at the absolute minimum, call the number on the letter and tell them you are working on their request and ask for more time if necessary.
- Attempt to review the information the IRS requested, and if necessary, call the IRS and request a record of what was sent to them for the tax year at issue, if you do not have corresponding records of taxable transactions.
- In answering their request, attempt to clarify and simplify their request and your response. A complicated answer may result in an unresolved issue.
- Keep copies of everything you send the IRS, in case they have additional questions, you will need to know what was sent originally.
- Stay patient, the IRS is busy and it may take some time to receive a response.
While it is never fun to see a letter from the IRS on your doorstep, with these steps, the experience may be slightly easier.
**Note – We are not CPA’s and as such are not recommending direct tax advice.
Have a Good Day!