Top tax tip: Open your mail
Ignoring correspondence from the IRS just gets you into more trouble. Missing deadlines costs you money. Plus, it's not always bad news.
This post is from Kelly Phillips Erb at Forbes.
A client contacted me recently week with a tax problem. He sent over a big pile of correspondence that he had received from the IRS. On the front of one of the letters, it read in big letters: Last Date to Respond to this Letter: XXXX 2011.
Um, it’s 2012.
The client missed the deadline. It’s a common mistake, one that I deal with on a pretty regular basis. And 9 times out of 10, the reason is quite simple: The taxpayer didn’t open the mail.
I get it. It’s scary to get something from IRS. So the whole “I’ll just ignore it” mentality kicks in for taxpayers. They let the letters pile up. They refuse to go to the post office to pick up the certified letter. Sometimes, they even leave the letters on the stoop.
At my office, it’s not unusual for clients to drop piles of unopened mail from IRS on my desk during an appointment . I’ve even had clients bring in Samsonite luggage full of certified mail, completely sealed. Post continues after video.
But here’s the thing. While I understand why it happens (usually fear, paranoia, panic and even depression), letting that mail sit is the single worst thing you can do when it comes to tax matters. This is a case of what you don’t know, could actually hurt you.
When you get a letter from IRS, take a deep breath and open the envelope. It’s rarely as bad as you think. Sometimes it’s an informational letter (advising you, for example, that you might need to file a certain form), sometimes it’s simply a notice of adjustment and, occasionally, you’ll receive a notice of deficiency.
What’s most important to remember is that IRS correspondence is generally time-sensitive -- there are deadlines. IRS deadlines are a big deal. Those deadlines affect your appeal rights and collections activities.
Depending on what the notice says, you may need to take action. Maybe you need to confirm a Social Security number or send a copy of a canceled check or other receipt. Maybe you owe some more money -- or maybe the IRS owes you money (it happens).
Maybe you need to write a letter or make a phone call. And this is the important part: Despite the story that I posted about an IRS rep who hung up on me -- on purpose, I’m still going to advocate that you contact the IRS when you have a problem. Or if there’s a notice. Again, ignoring the problem doesn’t make it go away and usually makes it worse.
I’m going to let you in on a little secret: The IRS is staffed with real people. They have friends and families and lives, too. Believe it or not, their job isn’t to make your life miserable. Most of the time, they really do want to help. But as cliche as it sounds, they can’t help you if you don’t contact them.
Those liens and levies? Stories about seizures? Those don’t happen without some effort from the IRS to notify taxpayers. The IRS has a whole set of procedures. The agency can’t levy indiscriminately. It can’t seize your property without notifying you that there’s a problem.
There are exceptions. I make my living dealing with a lot of those exceptions. But many times, opening and responding to the mail would have changed the outcome of a lot of the horror stories you hear. Trust me.
To contact the IRS about your tax account, start with your notice or letter. Generally, there is an address on the top left hand corner and a contact name and/or phone number in the top right hand corner. That’s the best contact to use because the folks at that number will understand what’s going on with your account. But if you’ve lost the notice or you have another issue, try these contact points:
- If you’re calling about your individual tax account, call toll-free 1-800-829-1040, 7 a.m. to 7 p.m. local time Monday through Friday.
- If you’re calling about your business tax account, call toll-free 1-800-829-4933, 7 a.m. to 7 p.m. local time Monday through Friday.
- If you a hearing impairments, call toll free, 1-800-829-4059 (TDD), 7 a.m. to 7 p.m. local time Monday through Friday.
- If you live outside the United States, the IRS has full-time permanent staff in four U.S. embassies and consulates (Frankfurt, Germany; London Paris; and Beijing). These offices have tax forms and publications, can help you with account problems, and answer your questions about notices and bills. Check out the International Services page on the IRS web site for specific contact information in these countries. Otherwise, call 267-941-1000), 6 a.m. to 11 p.m. EST Monday through Friday or fax the Philadelphia Service Center at 267-941-1055.
You can also visit a IRS Taxpayer Assistance Center. To find the office nearest you, click here.
What if you still can’t bring yourself to pick up the phone or send a letter? Have your tax professional or other third party do it for you.
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