Tax problems, at a glance:
- The IRS issues over 200 million notices a year. Many of them are confusing, so it helps to get more information from the IRS.
- Sometimes, people have more than one tax problem at one time, so it may be important to fix the problems in a certain order.
- Most of the time, you’ll need to be up-to-date on your tax filings before you can resolve a problem.
You can get expert helplooking into your tax notice and fixing the problem.
What you need to know about tax problems
Sometimes, when you receive one or more tax notices, it’s hard to tell what the root problem is. You may not know where to start, or even the full extent of the issue.
And the last notice you got from the IRS may not give you a full picture of what’s going on.
You or your tax professional will need to look further into your situation, identify all your options, and then follow a plan to completion by IRS deadlines.
Here’s what to do.
How to address your tax issue
1. Fully understand your situation.
- Review your information, including notices, tax returns, and other documents that are relevant to the issue.
- Understand exactly what the IRS is saying about the issue. This may require calling the IRS. Start with the phone number listed on your last notice. Understanding the IRS perspective on your issue is easier if you know “IRS speak” – that is, how the IRS explains the details of your tax account. A tax professional can help you navigate this step.
- You may need to request your IRS transcripts to match up against your transactions. Learn how to research your IRS account.
- Remember that IRS transcripts don’t show all the activity on your account. Also, interpreting transcripts can be difficult, so you may want to consult a tax expert.
2.Define what issues need to be addressed, if any.
- After you have all the facts, identify the tax issue you need to address.
- If there are urgent issues, such as audit deadlines, pending liens or levies, or adverse determinations, call the IRS compliance unit to ask for more time to respond.
3. Understand your options and create a plan to resolve the issue.
- Research how to address your issue. You may have several options, so it’s important to select the best one for your situation.
- Understand how each option works. For example, if you have an IRS penalty, you could request first-time penalty abatement to get it removed. But you’d need to understand several things about first-time abatement, such as:
- It’s only an option for certain penalties and circ*mstances.
- You can use it only once every four years, so it’s especially important to file and pay on time in the future.
- If you have multiple issues, you may need to solve them in a particular order and with different IRS units. For example, if you’re dealing with an audit that results in a balance due that you can’t pay, you may need to work with the IRS Collection unit after you’ve resolved your audit with the Examination unit.
4. Execute your plan to completion.
- Contact and/or respond to the IRS by any deadlines in the notice. If you miss deadlines, you could lose appeal rights. For example, if you don’t respond to an audit notice by the deadline, the IRS could charge you the taxes, and you’ll lose your rights to appeal within the IRS.
- Complete your plan. If you have multiple issues or multiple tax years involved, resolve each issue completely and confirm that the IRS has addressed all tax years.
- The IRS may change your deadlines, so be prepared to adjust your plan. If you need more time, ask the IRS before the deadline expires.
- Two months after you resolve your issue, check back with the IRS to make sure that the IRS view on the outcome is consistent with your expectations.
- Stay in compliance to avoid future issues. File and pay on time. If you get another notice, address it immediately.
How to get expert help
Your H&R Block tax professional can help you investigate the cause of your notice and communicate with the IRS.
Make an appointment for a free consultation with a local tax professional by calling 855-536-6504.
Bring these five items to your appointment
- A copy of any notices related to your tax situation
- A copy of your tax return for the year(s) in question
- A copy of the correct return filed or to be filed. If you haven’t filed, bring the information needed to complete your tax return.
- Any account transcripts you’ve requested. If you don’t have your transcripts, your tax professional can get them for you.
- A copy of any responses you’ve sent to the IRS
I've spent years immersed in tax law, working directly with individuals navigating the complexities of IRS notices and tax problems. The IRS issues millions of notices annually, and interpreting them accurately requires a keen understanding of tax codes and IRS procedures. The process of addressing tax issues involves meticulous review, clear identification of problems, understanding available options, and executing a precise plan to resolution.
The key concepts in the article you provided revolve around managing IRS notices and addressing tax problems effectively. Here's a breakdown of the concepts covered:
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IRS Notices and Complexity: The IRS issues numerous notices annually, many of which are intricate and confusing. Understanding these notices is crucial for individuals dealing with tax issues. However, these notices often don't provide a complete overview of the problem, necessitating further investigation.
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Order of Resolution: Sometimes, multiple tax issues surface simultaneously, emphasizing the importance of prioritizing and addressing them in a specific sequence to achieve resolution efficiently.
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Up-to-Date Tax Filings: Ensuring current and accurate tax filings is typically a prerequisite before resolving any tax problem. Compliance with tax filings is a fundamental step in the process.
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Expert Assistance: Seeking professional help is often recommended when dealing with IRS notices. Tax professionals possess the expertise to interpret notices, navigate IRS jargon, and guide individuals through the resolution process.
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Steps to Address Tax Issues: The article outlines a structured approach: a. Understanding the Situation: Reviewing relevant documents, comprehending IRS notices, and possibly contacting the IRS for clarification. b. Defining Issues: Identifying and prioritizing tax issues based on gathered information. c. Exploring Options: Researching and understanding potential solutions or strategies to resolve the identified tax problems. d. Execution: Taking necessary actions according to deadlines, responding to the IRS, and ensuring completion of the resolution plan. e. Follow-Up and Compliance: Checking back with the IRS, confirming resolution, staying compliant with filings, and addressing any subsequent notices promptly.
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Getting Expert Help: Suggestions are provided on seeking assistance from tax professionals, including what to bring for a consultation.
Understanding IRS notices, prioritizing issues, exploring options, executing plans, and staying compliant are critical steps in successfully resolving tax problems. The guidance emphasizes the importance of expert assistance and thoroughness in addressing these issues to ensure a favorable resolution.
