IRS Letter Resolution: Navigate Notices with George Dimov CPA

The IRS sends letters for various reasons, typically related to your tax return or account. Common reasons include discrepancies in reported income, unpaid tax balances, or audit notifications.

You might also receive a letter if there’s missing or incorrect information on your return, or if the IRS made changes to your filing.

In some cases, they may request additional information or need to verify your identity. Remember, receiving a letter doesn’t always indicate a problem; sometimes it’s simply informational.

In 2024, the IRS may contact you regarding your recent tax filings or ongoing tax matters. Common reasons include:

1. Reviewing your 2023 tax return
2. Following up on previous years’ tax issues
3. Notifying you about tax law changes affecting past returns
4. Requesting additional information due to processing delays
5. Alerting you to potential identity theft concerns

The specific reason will be clearly stated in the letter. It’s important to read the entire notice carefully and respond promptly if required.

The IRS issues various notices, each serving a specific purpose. The most frequently sent notices include:

1. CP2000: Proposed changes to your tax return
2. CP14: Balance due on unpaid taxes
3. CP501: Reminder of balance due
4. CP523: Intent to levy notice
5. CP3219A: Statutory Notice of Deficiency

Each notice has a unique code and provides detailed information about the issue at hand. It’s crucial to understand the notice type to determine the appropriate action required.

An IRS audit letter has distinct characteristics to ensure its authenticity. It typically arrives via certified mail and contains “Department of the Treasury – Internal Revenue Service” letterhead.

The letter will include your name, taxpayer ID, form number, and IRS contact information. It specifies which items on your return are being examined and requests specific documents.

The letter also provides deadlines for your response. If you’re unsure about the legitimacy of a letter, you can always contact the IRS directly using the official contact information on their website.

The IRS will clearly inform you if you’re being audited through an official audit letter. This letter arrives via certified mail and specifies which tax return(s) and items are under review. It will request specific documents or information and provide contact details for the assigned IRS agent.

You’ll also be given a deadline to respond or schedule an appointment. It’s important to note that the IRS never initiates an audit through email, phone, or text message. If you receive such communications claiming to be an audit notification, it’s likely a scam.

While the IRS uses complex algorithms to select returns for audit, certain factors may increase your chances. These can include significant changes in income from year to year, unreported income, or large charitable donations relative to your income.

Home office deductions, cash-intensive businesses, and claiming 100% business use of a vehicle may also draw attention.

Consistently reporting business losses or claiming deductions unusually high for your income bracket can trigger scrutiny. However, being flagged for audit doesn’t necessarily mean you’ve done anything wrong; sometimes returns are selected randomly for review.