How to Reduce My Number of Tax Notices
Do you have stacks of tax notices, possibly some from years ago? You might be wondering why the IRS sends you so many letters and how to get fewer tax notices.
Unfortunately, tax notices are part of doing business. They can come from federal, state, and local jurisdictions, and businesses receive them for reasons. Many notices do not require action and are for your records only.
However, once they pile up, they become an overwhelming task that is harder and harder to handle.
Tips to Reduce Your Tax Notice Volume
All businesses receive tax notices. There are a few things you can do to reduce the number of tax notices you receive:
- Do your best to remit the correct amount in taxes. Many notices are for over- or underpayment of taxes.
- Respond to all notices that require a response promptly. In addition to charging late fees, many jurisdictions keep sending notices until they receive a response, making your volume pile up.
- Make sure you meet all deadlines. There is no way to eliminate notices. Some are simple reminders to file something by a specific date or a change in your deposit frequency. However, responding to anything that requires a response is the best way to reduce the number you receive.
- Make all your filing electronically. An increasing number of agencies require taxpayers to file online or with electronic files to help save time and quickly validate the data and its accuracy.
Why Tax Notices Pile Up
Tax notices pile up because jurisdictions like to send multiple reminders and follow-ups. For example, you may get an initial notice reminding you of a quarterly filing date and then another notice close to the time to remind you.
They can pile up very quickly if you get behind on your tax notices. That then makes organizing them even more challenging, making dealing with them into what feels like an insurmountable task. It can quickly snowball and cause you to miss an important notice or incur penalties.
As tax codes become more complicated for businesses, the number of notices a company receives only increases, making it even more challenging to organize your notices. It also means you can't necessarily go "on autopilot" and predict what notices you will receive and to whom you must send them.
Use Automation to Stay on Top of Tax Notices
Traditionally, tax notices are processed manually, meaning somebody (typically an office assistant) opens the tax notice, marks it in a spreadsheet, then manually reroutes it to the correct person.
There are multiple stages here at which an error can occur. Notices may get overlooked, improperly entered into the spreadsheet, or routed to the wrong person. They may also end up sitting on somebody's desk for a while because they keep forgetting about them. This slows down your ability to process tax notices, risking expensive fines and causing duplicate notices to pile up.
How Automation Software Reduces Your Notice Backlog
Promptly handling notices is the best way to keep them under control, and automation software is the best way to do that. With an automated tax notice processing system like NOTICENINJA, the person must simply open the notice and scan it into the system. The software handles the rest by:
- Identifying what type of notice it is
- Filing it digitally and appropriately in a centralized system everyone can access
- Alerting the appropriate party that there is a new notice
- Tracking of the agency due dates and follow-up dates in the calendar to address by urgency
Even if the original physical notice is lost or misfiled, the information will be readily available and sent to the right person. That improves organization by saving time and hassle, letting your team focus on essential tasks, and not letting anything slip by.
If you are wondering how to lower your tax notices, the best thing you can do is take care of them when they come in. By keeping your tax notices organized, you keep them from building up and reduce the number of duplicate reminders you might receive.
Let NOTICENINJA Help You Stay in Control
NOTICENINJA helps you track, manage, and resolve your tax notices. It automatically distributes them to the right people, helping you set up a task management system to ensure all documents are readily available in a centralized system. It is the best solution to your tax notice problems.
If you have any questions about tax compliance, notice tracking, or digital notice compliance, we invite you to visit our website or click the button in the header to schedule a meeting with us. Our team of experts is always available to answer your questions and help you navigate the complex world of tax notices and audits. Don't hesitate to reach out – we're here to help!