Responding to IRS letters

When it comes to dealings with the Internal Revenue Service, it is more important than ever to know the rules of the game.  Many taxpayers receive a threatening letter from the IRS, and immediately call the IRS using the number provided on the letter.  Sadly, some of the mistakes made on that initial phone call can set you up for failure when attempting to resolve your tax issue.  Other taxpayers will simply ignore the letter from the IRS and hope the issue goes away.  Unfortunately neither of those responses are the right answer.

First, it’s key to take immediate action when you receive a letter from the IRS, your tax issues will not go away on their own.  What’s equally important is to recognize that those immediate actions may set you up for failure, or set you up for success.  In order to avoid the common pitfalls taxpayers make, you need to be well informed.

FACT: The IRS will use anything you say or documentation you provide against you.

Information you share with the IRS via phone, or in written correspondence can be utilized by them to assist them in their enforcement and collection efforts against you.  In fact, IRS agents will often ask for more information that needed, hoping that you overshare and they can use that information as leverage against you.  For example, a bank statement utilized to provide evidence for one item, could also contain damaging information as it relates to another tax matter.  Even worse, it can give you problems related to other governmental agencies including federally backed student loans, child support, and other legal matters.  Further, the information you provide for a given tax year, could create implications related to prior and future tax years.

Often taxpayers find themselves in very challenging situation due to over-sharing.  Having a “less is more” philosophy will serve your well, as you have no duty to disclose information beyond what is needed to resolve your tax matter.  Unfortunately, you likely do not know what information is needed, or that sharing more information can work to your detriment.  Be diligent when corresponding with the IRS to ensure you are not negatively impacting your situation by sharing too much information.

Lastly, bear in mind, the goal of the IRS is to collect a debt.  They are not on your side, and they are not there to help you.  You need someone on your side, and we have had the privilege to work with taxpayers just like you, protecting them from the IRS.  Get Started with us today to have a strong advocate working on your tax issues.