The IRS normally sends correspondence in the mail. They mail millions of letters to taxpayers every year. Keep these important points in mind if you get a letter or notice:
Don’t ignore it. You can respond to most IRS notices quickly and easily.
Follow instructions. Read the notice carefully. It will tell you if you need to take any action. Be sure to follow the instructions. The letter will also have contract information if you have questions.
Focus on the issue. IRS notices usually deal with a specific issue about your tax return or tax account. Your notice or letter will explain the reason for the contact and give you instructions on how to handle the issue.
Correction Notice. If the IRS corrected you tax return, you should review the information provided and compare it to your tax return.
If you agree, you don’t need to reply unless a payment is due. If you don’t agree, it’s important that you respond. Follow the instructions on the notice for the best way to respond to the IRS. You may be able to call to resolve the issue. Have a copy of your tax return and the notice with you when you call. If you choose to write, be sure too include information and any documentation you want considered. Also, write your taxpayer identification number (Social Security number or individual taxpayer identification number) on each page of the letter you send. Mail your reply to the address shown on the notice. Allow at least 30 days for a response.
In addition, if you file a return but don’t pay all tax shown as due on time, you will generally have to pay a late payment penalty. The Failure to Pay Penalty is one-half of one percent for each month, or part of a month, up to a maximum of 25 percent of the amount of tax that remains as unpaid form the due date of the return until paid in full. The one-half of one percent rate increases to one percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy property. If you file your return by its due date and request an installment agreement, the one-half of one percent rate decreased to one-quarter of one percent for nay month in which an installment is in effect. Be aware that the IRS applies payments to the tax first, and then to any penalty amount charged each month.