Receiving a tax notice that you owe the IRS can be quite disturbing. It is easy to get into the mindset of just ignoring it and hoping it will go away. Unfortunately, ignoring it will only make matters worse. The best thing you can do is try and resolve it, like most things in life. Get ahead of it and take care of it as soon as possible so you can move on.
Being proactive to pay off your tax debt generally provides for the best options. By taking action as soon as you receive your first notice, you can stay out of IRS collections. Below is some general information to guide you through to the start of the tax resolution process:
1. Open the IRS notice letter and timely respond if requested
Too many times, taxpayers put an IRS letter aside. Face it and open it. The very thought of it seems dreadful and inside the letter may be a bit of a shock, but get it over with and read what they have to say. Sometimes it may not be as bad as imagined or it may just be a simple mistake that can be cleared up quickly.
It is also very important to respond because the IRS generally sets out a certain response deadline in their letters. If you ignore the deadline, you may incur more IRS problems such as increased penalties and interest. Be sure to provide them with exact documentation needed and make copies of all correspondence from them and to them.
2. Read IRS Publication 1 and know your rights
IRS Publication 1 explains your rights as a taxpayer including:
- The right to be informed
- The right to quality service
- The right to pay no more than the correct amount of tax
- The right to appeal an IRS decision in an independent forum
- The right to finality
- The right to privacy
- The right to confidentiality
- The right to retain representation
- The right to a fair and just tax system
Generally, your rights are preserved and respected by most IRS representatives. IRS employees can be very helpful, however, if you do run into problems, respectfully remind them and refer them to Publication 1 to get them back on track with the discussions. Also, knowing your rights can instill confidence making for more understanding and effectiveness in getting your IRS tax issue resolved.
3. Determine whether the tax is actually owed
It’s no surprise that the IRS makes mistakes. Determine the IRS tax problem, be concise and support all of the reasons you may not owe the tax or why they made a mistake. And certainly, if you cannot figure out how the IRS arrived at the tax amount, get some IRS help and hire a reputable tax attorney.
4. Call the IRS if necessary
This may be a touchy subject. Generally taxpayers are scared to death to call the IRS. Who wouldn’t be? It is intimidating and certainly tempers can be high. However, if you can keep a level head and endure the wait time, it may be the best way to find out what is going on if there is confusion or a dispute with your tax bill. If this is not possible, finding an IRS tax attorney to assist with your IRS tax problems should be an option to consider.
If there is no dispute as to the tax owed, before calling in you should have a working knowledge of the most common tax resolution options such as:
- IRS currently not collectible status;
- Offer in compromise;
- IRS payment plan; and
- Innocent spouse tax relief
For further information or help with you’re a specific debt relief situation, call Delia Law Tax Law Firm in Los Angeles at (310) 494-0100 or request a free tax attorney consultation.