James B. Urie, Esquire

When you receive a letter from the IRS, four simple actions will help you avoid further complications

Most of us look forward to getting the mail each day. Perhaps there will be a few of our favorite store catalogs to browse through – perhaps even a personal letter or postcard from a relative on an exotic vacation in a far away land, as well as the usual bank statements and credit card bills. But one sight can immediately turn that normally pleasant experience sour – an envelope bearing those three dreaded letters in the return address: I-R-S.

What you do immediately after receiving such correspondence may determine whether or not you receive any additional and, perhaps, more urgent and troubling notices from the IRS. The following four steps will help you begin to address the IRS's needs in a timely manner, and avoid further complications.

1. Open the letter immediately. This simple action could save you thousands of dollars in tax, interest, and penalties. Ignoring mail from the IRS only begets more mail from the IRS.
2. Read the letter thoroughly and determine what the IRS wants. Do not automatically assume it is bad news. The IRS may simply be informing you about a new tax credit or updating the status of your refund. The letter might be about any number of things, not all of them troublesome, so make sure you read it.
3. If the letter concerns a problem with your tax returns, gather all of the tax information relating to the tax period(s) mentioned in the letter, including a copy of the filed return(s). By taking this action you may be able to resolve the problem yourself. For instance, if the notice states that the IRS is missing Schedule D for your 2002 return, make a copy of the form and mail it to the IRS. If the notice is of the variety that will require professional assistance, you will have already gathered the information that your advisor will need and likely request from you.
4. Respond to the letter within the given period of time. Most IRS notices are time sensitive and, in the eyes of the IRS, no response is the same as an adverse admission – resulting in a more severe and urgent notice. There is a qualification on this step, however, as your response will depend upon the type of notice you received.

Just by taking the steps outlined above, you may be able to resolve any outstanding issues and avoid further action by the IRS.

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