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Tips if you get an IRS letter in the mail

The IRS offers the following tips if you receive a letter/notice from them:

• Do not ignore it. Some people feel if they do not address the letter it will go away but the IRS will follow up on the issue even if you do not respond.
• Keep a copy of the letter. Always make sure to save a copy of the letter, you may need to reference it later or need it for your tax return prep.
• Do not reply unless you are instructed to. Make sure to read exactly what the IRS is looking for, in many cases you will need to respond.
• Respond in a timely manner. The notice will give you a deadline to respond, make sure to address the notice before that deadline.
• Review the information closely. You should not just pay a notice without finding out if the changes made by the IRS are correct or not, in some cases the IRS is not correct. A perfect example is if you forgot to include stock sales of $10,000 on your return the IRS will send you a bill taxing you on the full $10,000, they fail to factor cost basis in. You may have paid $8,000 for those stocks so you should only be paying taxes on the $2,000 gain, not the full $10,000 sale. You would need to amend your tax return in this example to add the stock sale with the cost.
• Do not be afraid to dispute the notice, the IRS is not always correct with their changes.
• Avoid scams. There are plenty of IRS scams out there so do you research on any correspondence from the IRS to make sure it is legit. A good way to verify the notice is legit is by calling the IRS directly, 800-829-1040.

The information provided in this blog does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available in this article are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. Please consult your tax advisor on all the above issues.

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