How To Answer IRS Letters

You may feel butterflies in your stomach even before you open an IRS notice. The amount of fear and anxiety an IRS letter come with.

However, there is no need to get petrified when you receive an IRS letter because not every correspondence from IRS is a bad news to be worried about. You just need to first read it carefully before your approach to your accountant or tax lawyer with the IRS letter.

There are several reasons due to which IRS sends notice to individuals and organizations; like requesting payment of taxes or notifying the changes in ones account details. There is absolutely no need to get panic.

You just have to follow the instructions before drafting a reply and there shouldn’t be any problem. You even do not have to reply if there are not any dues of tax payment. In case you disagree with the information changes notified by IRS department in the letter, then only you need to write to them to make the required correction or changes.

Here is how you need to answer IRS letters in case a situation arises.

  • Your letter should reflect the information in a clear and precise way. Do not use the language which is informal or confusing.
  • Make sure to address all the concerns and questions raised by IRS. Try to make a point by point rebuttal.
  • Follow the instructions written in the letter carefully and make sure to reply within the time line defined by the IRS. Missing time line could lead further action and could increase your problems.
  • Always produce supporting documents to substantiate your claim against the concerns of IRS.
  • Always reply in a humble and respectful tone even if when you think the questions and concerns raised by the IRS department are not true and bizarre.
  • Lastly, if you have any confusion and are not able to understand the contents of an IRS letter like IRS notice of deficiency assistance or any other notice; it is always better to contact an accountant or a tax lawyer to understand the issue clearly at first hand before preparing a reply in your defense.

And the best way around to avoid an IRS notice would be to keep your books clean, pay your taxes on time and live an honest life. Period.

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