However, getting an IRS letter does not always mean bad news, as you’ll find out in some of the following five reasons why an IRS letter may arrive in your mailbox.
You are Due a Larger Refund
See, it is not always bad news when you get an IRS letter. Like many taxpayers, the agency may send you a letter stating that you are actually due a larger refund than the one you initially expected.
Upon receiving this letter, you usually need to do nothing but wait on that refund check, since it’s likely the IRS has already taken care of the details.
You Have a Balance Due
Now for the bad news. If you get a letter stating you owe more taxes than you paid, the one thing you don’t want to do is ignore it and hope it goes away. If you do, your problem will only get worse.
The IRS has the authority to garnish your wages if you choose to ignore your tax obligations. Before you know it, you may be seeking out tax garnishment solutions.
It’s much better to set up a payment plan with them before it reaches that point, but life does happen. You wouldn’t be the first nor the last to have them garnish your wages.
The IRS Changed Your Return
It is not uncommon for the IRS to change tax returns, which tends to work in the favor of taxpayers. For example, if you failed to take advantage of a certain tax credit, the IRS may send you a letter stating they changed your tax return and how the change will impact your refund or payment.
Just as you are required to file taxes truthfully, the IRS is obligated to ensure accuracy.
They Need Additional Information
Sometimes, the IRS will send you a letter stating they need additional information before they can continue processing your tax return. This can be additional financial information, or something as simple as verifying your new address or new name, which is common if you have moved or are recently married or divorced.
By promptly sending in whatever information was requested, you should have no problems.
It’s wise to keep all your important documents in a safe place that’s easily accessible. Then, if the IRS does ask for additional documentation, you can locate them swiftly.
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You Are Being Audited
Finally, if you are being audited, the IRS will always send you a letter notifying you of the date this will take place, as well as some reasons as to why the audit is occurring.
Before you panic, remember that the IRS regularly does random audits of returns each year, so this letter does not necessarily mean they are accusing you of wrongdoing.
The first step of audit preparation is to stay calm. Then you’ll need to gather the appropriate returns for the dates the IRS requested. The audit notification will contain further details on how to proceed.
If you take an IRS letter seriously from the beginning and comply with whatever requests are asked of you by the agency, everything can turn out much better than you expected. Don’t hesitate to reach out for help if you have any questions.
The IRS isn’t some mythic and unreasonable monster;
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