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Anne Powelson Anne Powelson
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If you hear from the IRS

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There it is, sitting in your mailbox, the unexpected envelope from the IRS. For many people it's a moment of dread.

Don't panic and don't ignore it. Receiving a letter doesn't mean the IRS will be beating down your door tomorrow. It means they have a question with your return, or are wondering why you haven't filed. Millions of these letters are sent out every year. To be fair, often times it is a request for more money. But not always; once in a while people get notices saying they will be issued a larger refund than expected. Whatever it says, don't burn it and hope it will go away. If no timely response is received, the IRS assumes you agree with their correction and begins making plans to collect it from future refunds or other sources.

Make sure you understand what they are asking.Common reasons forms are issued include: a) the IRS has received an income document, like a 1099-MISC, that they don't see included on your return; b) information is read differently by you and the IRS, you write '6' and they read '0' or c) tax forms which are incomplete or incorrect. Be sure you understand what the letter is asking for; if you don't, ask for help; from the IRS or your tax preparer. If you are calling the IRS, call the number in the upper right-hand corner of the notice and have your tax forms ready.

Don't be afraid to ask for an extension.These letters have a due date.Maybe you've moved, and it's taken awhile for the letter to find you. Don't give up, call the IRS and request an extension.

If you had your taxes prepared, contact your tax preparer.Please check with your preparer right away, not next year when you are filing again. Even if you think the IRS is right, make sure there are not some mitigating circumstances. For example, you forgot to report an early withdrawal from your IRA, but because you paid higher education expenses that year, the full penalty is not due.

If you disagree.If you disagree with the correction that the IRS made, it is important that you respond. Write to explain why you disagree. Include any documents and information you wish the IRS to consider, along with the bottom tear-off portion of the notice. Mail the information to the IRS address shown in the upper left-hand corner of the notice. Allow at least 30 days for a response.

Don't forget the State (or vice versa).If there is an error on your Federal return, it often flows through to the state return. When you correct your federal return, you may as well correct the state return. Doing so will limit the interest and penalties associated with the change.

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Anne Powelson is a tax preparer for H&R Block in Bangor. Send your questions or feedback to This e-mail address is being protected from spambots. You need JavaScript enabled to view it or (207) 947-0333.


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