IRS Resolutions: What To Do When The IRS Sends You A Letter

It’s not a good feeling when you flip through your mail and see a letter from the IRS. It’s likely your heart starts pounding and a million thoughts race through your head: What would the IRS want from me? Am I being audited? What did I do wrong?

Chances are, there’s no need to panic. The IRS sends out millions of letters every year—most of which are relatively harmless. So take a deep breath, lower that heart rate, and read closely. Here are 3 steps you should take when the IRS sends you a letter. 

1. MAKE SURE IT’S LEGITIMATE

Fake IRS letters, emails, and phone calls are some of the biggest threats faced by taxpayers. But know this: the IRS will never contact you via email, text message, or social media. (1)

If you receive a suspicious letter from the IRS, protect yourself by making sure it’s legitimate. You can tell the letter is legitimate if: 

• It’s delivered via the United States Postal Service (USPS).
• It’s in a government envelope and has an IRS seal on it.
• It includes your truncated tax ID number and the tax year in question.
• The IRS contact information is at the top of the letter.
• The letter lists your payment options (There should be several payment options, and checks should only be made payable to the U.S. Treasury.)

If you’re still unsure if the letter is legitimate, call the IRS at 800-829-1040. You can read more about IRS scams here. 

2. IDENTIFY THE REASON FOR THE LETTER

As I said before, don’t panic if you receive a letter from the IRS. It doesn’t automatically mean you’re being audited. The IRS usually mails letters for the following reasons: (2)

• You have an outstanding balance.
• Your refund amount has changed.
• The IRS has a question about your return or needs additional information.
• The IRS changed your return.
• You need to verify your identity.
• Your return has been delayed due to processing.

3. RESPOND TO THE LETTER 

Once you’ve identified the reason for the letter, take action if needed. In some situations, such as when you receive an informational notice from the IRS, you may not need to do anything at all. If action is needed, your letter should include step-by-step instructions on what you need to do to resolve the issue. Keep copies of the letter and your response on file.

If the IRS letter states you owe money, you can either pay the balance in full using the methods in the notice or you can set up a payment plan. Since the IRS has been known to make an error or two, be sure to confirm the amount due before paying. 

WE’RE HERE TO HELP

Dealing with the IRS can seem complicated and scary, but it doesn’t have to be. Whether you’re preparing your taxes, facing an audit, or anything in between, we at HBA Wealth are here to help. To learn more, set up an appointment today by contacting us at (626) 529-8347 or emailing Ricky directly at [email protected].

ABOUT HAYDEL, BIEL & ASSOCIATES

Haydel, Biel & Associates is an independent financial advisory firm serving individuals and families near Pasadena, California. The firm was founded in 2004 by Chris Haydel and Ricky Biel with a desire to provide unbiased, client-centered, community-based financial advice. Together, they have built a practice that has grown into a family of caring, smart professionals committed to blending proven investment methodologies with creative financial technologies that make it easier than ever to accomplish your goals. They strive to keep things simple and fun to give their clients peace of mind and alleviate financial stress. HBA Wealth takes care of their clients’ needs first and foremost and goes the extra mile to make their clients’ finances grow. To meet and see how the HBA Wealth team may be able to help, contact them today at (626) 529-8347 or email Ricky directly at [email protected].

The commentary on this blog/website reflects the personal opinions, viewpoints and analyses of the Haydel Biel & Associates employees providing such comments, and should not be regarded as a description of advisory services provided by Haydel Biel & Associates or performance returns of any Haydel Biel & Associates Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Haydel Biel & Associates manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

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(1) https://www.irs.gov/privacy-disclosure/report-phishing

(2) https://www.irs.gov/individuals/understanding-your-irs-notice-or-letter