It’s human nature to avoid opening an envelope from the IRS (or any taxing authority) – because more than likely it is not a love letter. But, the majority of these IRS Letters, IRS Notices, etc. can be resolved fairly quickly and easily with a phone call and/or fax. Avoiding the details as to why the IRS is contacting you can frequently lead to more complications, time and expense than is necessary. Contacting the IRS, and addressing whatever the issue might be, as soon as possible, is critical.
What to look for on the Notice or Letter
The IRS correspondence will identify the type of IRS Letter or IRS Notice it relates to in the upper right hand corner of the first page (e.g. CP2000), the related Tax Year, date of correspondence, the IRS telephone number to call, and other details. The front page may also indicate whether there is a Proposed or Assessed tax amount due – which frequently does not represent the true facts and circumstances.
What to do if you owe money
In the event you legitimately owe additional tax, and/or penalties and interest, the IRS will typically deal with the issue reasonably. That is to say, allow time to pay off the amount owed, set up installment payments, waive a penalty for a first time offense, correct the issue with additional information, and at times agree to reduce the amount required to settle the tax liability.
What to do if you owe the IRS and California Franchise Tax Board (FTB)
Typically, when a taxpayer owes money to the IRS and California the conventional wisdom is to pay as much as possible to California and work out an arrangement with the IRS. This is because the IRS is likely to be more flexible in resolving the debt.
In a nutshell
Often when a taxpayer speaks directly with the IRS they can resolve the issue themself with a little bit of time and patience. However, if you would like some professional assistance, please do not hesitate to contact Scott at Income Tax Service of Redlands. (909) 792-5056.