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Audit Letters From the IRS

By: Rich Chappo..

Picking up the mail each day should not be hazardous to your health. That being said, there are a few letters you can receive which can raise your blood pressure. Getting one from the IRS that does not contain forms is surely the stuff of the end of the world.

Most mail from the IRS is thick. Whether you realize it or not, we are all conditioned to not freak out when such a letter comes. It is forms and we inherently know this. Ah, but what if you get a thin letter. This one is different and different means bad news.

An IRS notice. It sounds fairly bland, but this is the stuff of heart attacks. Why? The innocuous sounding IRS notice is issued for one purpose. It is notifying you the agency thinks there is something dubious about your taxes. You might want to put 911 on speed dial.

Importantly, this one page letter is not always the precursor to doom. In very rare circumstances, it can contain good news. I once received one. After recovering from an anxiety attack, I actually read the letter and learned I was due just under twenty bucks.

The bad news is you are probably being audited if you receive this letter. Go ahead, cry. Let it out. Once you are done, actually read the full letter. The audit may not be the torturous event you are imagining. In fact, it rarely is.

The IRS is understaffed. As a result, it does not have the ability to do a massive number of audits. Instead, it does many of them by mail, known as correspondence audits. This means you get to skip a meeting with an agent and try to resolve things through the post.

With a correspondence audit, the nature of the dispute will be identified in the letter. The agency will often indicate it doesn’t buy one of your deductions. It will also suggest a revised amount due on your taxes. In short, the problem and solution is provided.

Once you receive the letter, the burden is on you. You are usually allowed to do nothing if you agree with the proposal of the agency. If you want to fight it, you have 30 days to send a letter saying as much and why.

If you accept the proposed changes, the audit is over as long as you take any required action such as sending in more money. If you want to fight the agency, you can. Understand, however, you might be opening yourself up to a full audit.

If you receive one of these letters from the agency, don’t feel like you are being picked on. The IRS sends out millions of them each year to handle issues with taxpayers. If you get a particularly nasty one, go talk to a tax attorney so you know your rights.

Article Source: http://www.articlesnatch.com

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