Getting a letter in the mail from the IRS can be very intimidating to the taxpayer. This is because the media & sometimes family & friends portray the IRS in such a negative light that we can overreact. But, there is really no need to worry until you open up the letter and see what it says as there could simply be a minor error on your tax return.
Follow the IRS Instructions in the Letter
First, read the letter to understand exactly what the IRS claims is an error on your income tax return. If the error is minor, such as a missing signature or an incorrect social security number, often times the IRS will just ask you to review your tax return & provide the correct information by a certain date. Make sure that you follow through & provide the correct information by the due date. If you used a tax preparer to file your return, make sure to consult with them as well before sending in the requested information to the IRS.
An Error Doesn't Mean You Are Necessarily Getting Audited
Receiving a letter from the IRS indicating that you have errors on your tax return doesn't necessarily mean that you will be getting audited. Mistakes happen & the IRS realizes that as they make them too. So, don't worry about a potential audit should your tax return have a minor error on it.
What if you Discover a Material Error
In some instances, as you are reviewing your return you may discover a material error such as incorrectly reporting marital status, deductions, or income. If this is the case, you should notify the IRS & file an amended tax return. You will need to complete FORM 1040x which cannot be filed electronically. It is best to have a licensed tax preparer (i.e. CPAs, EAs) complete the FORM 1040x for you even if you filed your original tax return on your own. The licensed tax preparers are more experienced and aware of potential mistakes when filing the amended return.
Your Refund Will Be Delayed
It is almost a certainty that your refund will be delayed if you are notified of an error as detailed above. Your refund is calculated based on the tax return information you provide and thus will not be processed quickly if the IRS needs to confirm certain details with you first.
Ryan S. Himmel is the founder of BIDaWIZ - the online marketplace for trusted answers from licensed business professionals (i.e. CPAs, CFAs, CFPs & More).
Visit us at BIDaWIZ to get help with your irs issues from top tax experts.
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