Things to Know If You Receive an IRS Notice

Have you ever received a notice from the IRS? For some, instant panic sets in at the very thought of it. Chances are you may never receive one. However, if you do, there are a few things you should know about how to properly deal with the correspondence.

1. Many of these letters can be handled with little effort, such as writing a letter, making a call, or sending a fax.

2. Review your records. If the IRS is requesting a payment, please do not mail the payment without verifying that the proposed information is correct. The emphasis on not instantly paying a balance due cannot be expressed enough. For instance, assume you sold stock that you purchased but forgot to report. The IRS will send you a notice calculating a gain based on how much you sold it for and they will assume that you paid NOTHING for that stock. Thus making you pay more in additional taxes than you have to.

3. Be sure to respond to the IRS. Although many of these letters may not require you to respond, some of them do. Please be sure to reply by the deadline date given on the notice, or your account may incur interest and penalties. If you are not sure if you should respond or not, or if you need more time to gather information, ask your CPA for assistance.

At Valley Oak Financial, it is our firm's policy to handle any error resolution via an IRS notice that was our fault at no cost to you. Regardless of who is in error, we will also provide a no cost review of the notice to determine the issues and course of action. If you have any questions regarding a notice that you received, please do not hesitate to contact Valley Oak Financial.