IRS notices should never be ignored. Regardless of what the IRS notice says, the questions raised should be addressed in writing. If you do not understand the notice, it is important that you bring it to the attention of a tax professional immediately. You do not want to risk losing valuable legal rights and/or having a forced collection action waged against your business. After the requisite amount of notices, the IRS may levy the bank account or garnish accounts receivable and the like.
What should I do with an IRS notice?
Read the instructions in the notice very carefully. Most notices will give specific instructions as to what must be done, as well as a specific due date. Only sign forms that you have read very carefully and completely agree with. The IRS will often include a form asking you to waive your right to challenge the mistake and agree to pay what is due. Once that is signed, the IRS will send you a bill.
What if I do not agree with the finding in the IRS notice?
Mistakes happen. Even the IRS may make a mistake in calculating any amounts owed. It is your responsibility to fix any mistakes that they make. For instance, if they are claiming you have an employer you have not listed, then check you records and verify if you worked for that employer. If you did not, type out a letter to the IRS specifying that you were never employed by the employer and that the mistake was the employer’s. This will then shift the burden onto the employer to fix the mistake in their records and send documentation to the IRS.
If your first attempt at correcting the problem has failed, it may be time to involve an attorney in the process. If you have any questions regarding your IRS notice or are having difficulties communicating with the IRS, contact a tax law attorney for a consultation.