What to Do When You Get a Tax Notice
Step-By-Step Guide on How to Respond to IRS Notices
Receiving a letter from the IRS can be anxiety-inducing, but it's essential to understand that not all IRS correspondence is a problem. Each year, the IRS dispatches millions of notices for various purposes, including seeking clarification on a tax return, informing you of an account modification, or requesting a payment. We will explore how to respond to IRS notices promptly by implementing well-structured systems.
Review the Notice Carefully
IRS notices are straightforward, clearly state the reason for sending the letter and its purpose, and provide instructions on what to do. Any outstanding balances and due dates for payment will also be explicitly outlined. Make sure to pay attention to these details to avoid overlooking any crucial information, which may lead to missed deadlines.
Respond Promptly with Relevant Documentation
Not every IRS notice requires a response, but if it does, act promptly. Take the time to thoroughly review the requirements, assemble the relevant documentation, and submit your response before the specified deadline. Failing to meet the deadline may result in additional late payment fees.
Keep in mind that since the onset of the pandemic, the IRS has been dealing with a backlog, meaning the notice may have been sent in error. If you disagree with the IRS letter, don't disregard it. Instead, send a letter explaining the reasons for your dispute and maintain a record of all the correspondence you send to the IRS.
Pay Any Balances Due
The notice will clearly state the amount of money owed and the reason for the payment. This information is typically at the top of the notice. Additionally, the notice will specify the deadline for payment, payment instructions, an itemization of the charges, and contact details should you require assistance or wish to contest the notice.
An automated IRS notice system can quickly calculate any total amounts due and maintain a record of it. Companies that cannot pay the total IRS balance can contact the IRS to establish a payment arrangement and remain in good standing.
Maintain Accurate Records
Business leaders receive numerous notices annually. It's easy to lose track of notices without proper organization. Proper notice management is vital for ensuring compliance, responding promptly, documenting interactions, facilitating financial planning, and providing peace of mind in dealing with unforeseen tax matters.
Utilize Notice Automation Software
Manually entering data into Excel spreadsheets when receiving a high volume of notices consumes significant time and effort for tax professionals by introducing the risk of human errors. The innovative automation software, NOTICENINJA, was designed to streamline the notice organization and response process. Powered by OCR scan-to-capture technology, it effortlessly automates data input, ensuring accurate tax notice information every time.
Partner with NOTICENINJA to Save Your Company Time and Money
Today's leaders juggle numerous responsibilities to ensure their company's success. Simplify your IRS notice compliance process with NOTICENINJA, a cutting-edge SaaS CRM trusted by global giants and service providers. With over a decade of leadership in the notice compliance industry, we're here to help corporations save time and money. Ready to learn more about what we can do for you?
Learn more about how to maintain tax notice compliance today.