When I have an initial meeting with clients I try to stress what to do if you receive a tax notice. Many times I will receive the tax information to prepare a return and a tax notice will be included that was either never addressed or was just paid.
While the IRS website does give some guidance on what to do with a notice at https://www.irs.gov/Individuals/Understanding-Your-IRS-Notice-or-Letter; I always recommend you send them as soon as you get them to your tax professional. In my case I review the notice in comparison to the return we filed. Then we look to see if what the IRS or the state is suggesting or requesting is first accurate and second what we intended to be filed.
Many times a notice is only partly correct and you can save money by reviewing it in connection with your filed return and responding in a manner that gives the IRS or state the information they need to correct it in their system. At the time of submitting the changes, I also recommend paying any taxes due, which means recalculating for the changes you agree with.This shows that you are making efforts to be accurate and pay what is due but that you truly disagree with the other changes.
The reason I stress making sure to have your tax professional review the notice before paying it is because once you have paid the amount the notice says is due then you will incur additional charges to file amended returns to fix it later. Most tax professionals stand behind their work and will respond to a notice for no additional charge; providing they had the information mentioned in the notice at the time they prepared the return. In cases where they didn’t have the information there will typically be a small fee to get you the response to the letter but it will be minimal compared to the fees to file amended returns later.
The Wassman CPA Services website and blog is meant to offer general information to our readers. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service. You should contact Wassman CPA Services for advice concerning specific matters prior to making any decisions.
