The dreaded IRS notice in the mail. Nobody likes getting an IRS notice that doesn’t include a refund check along with it. But the truth is if you live long enough you are bound to get an unhappy letter from the IRS at some point. Many of my clients come to me only after they have received several, progressively more grave, notices from the IRS requesting a tax return or payment of a back tax debt. When I talk to the IRS agent assigned to the case, I am often told that the client has repeatedly ignored IRS notices and requests for financial information. Of course, this makes my job more difficult because whatever trust and goodwill exists between a taxpayer and the IRS in the early stages of a tax dispute has effectively evaporated.
Address the Problem Early Rather than Later If you anticipate that you will have an IRS problem, it is wise to do something about it before the IRS ever contacts you for three reasons:
- You will be able to address the problem on your own terms and on your own time table.
- It decreases the likelihood that the matter will be referred to the Criminal Investigation Division.
- Voluntary compliance, even if it is late, will help you get better terms when the time comes to negotiate a settlement or installment payment agreement with the IRS.
If you are unaware of the tax problem or the IRS has already begun making inquiries about your tax status, the best and most effective time to handle the problem is upon the IRS’s first contact. Usually, you will get several notices before the IRS resorts to aggressive collection actions like liens, levies, and asset seizures. Your chances of resolving your IRS problem amicably and on terms favorable to you are greatly increased the earlier in the process you begin to seriously address that problem. I find that most taxpayers ignore IRS notices because they find it too stressful to deal with them. But I can assure you that the discomfort that comes from having to face an IRS problem in its early stages is child’s play compared to the agony of having to deal with the IRS in the latter stages of the collection process.
Get Professional Advice Contact me immediately upon receipt of any notice from the IRS, and I will be happy to give you an assessment of what the notice means, and recommend a course of action.