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IRS or State Letter

Letter from IRS or State

Reasons for receiving a letter from the IRS or the state include:

Mistakes on the return

  • Missing RSU/Stock option income: many taxpayers file their return without properly accounting for their RSU or stock option income, which causes them to receive a CP2000 or other similar notice. The CP2000 is the most common notice & is received for any of the situations below.
  • Missing 1099-K or 1099-MISC: many taxpayers run an online business or make a few sales on Ebay, Etsy, or similar platform & then do not report the income on their return under the false assumption that if the activity was not profitable, then there is no income to report. The IRS and state(s) do not know your business was not profitable – you have to tell them by filing a schedule C along with your schedule of expenses. If this was not done, you will receive a letter & must amend the return.
  • Rollover or withdrawal from a 401k or IRA: these 1099-Rs are frequently missed, as are K-1s, 1099-DIVs, and other forms
  • Many other reasons 

Failure to file a return

The IRS and the states send letters when they believe you should have filed a return. This happens also for businesses owners. We receive surprised calls from business owners that did not know that you had to file a return if your business had no activity. That’s right – the IRS and most states require most business structures to file even if your company had no activity and will assess a penalty for late filing of these zero-activity returns. Contact us on how to resolve this matter.

Audit/request for more information

The IRS occasionally audits taxpayers, especially ones with aggressive deductions, schedule C businesses (freelancers, sole proprietors, single-member LLCs, etc.). They normally ask for receipts or other backup to substantiate the expenses. Contact us for representation support below.

If you have issues with any of the above, please scan ALL PAGES of the letter received & send (or share securely) with and we will take a look right away. We are available assist remotely with clients in all 50 US states and dozens of nations globally.

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