“You know what I want to do today? Call up the IRS,” said no one, ever. 

I know, I know. Dealing with the IRS is never fun. It’s even less fun when you have tax problems at hand. 

These issues could stem from a simple mistake on your part or on theirs. Maybe you’ve run into challenges when you couldn’t pay the balance due, or maybe your tax return has been selected for audit. Here’s how to avoid those issues before they snowball. 

1. Open your mail.

Seems simple, right? But we get it – you’ve had a long day, and sometimes the last thing you want to do is open a letter with a return address labeled “Internal Revenue Service.” Snail mail seems ancient – but it’s still the IRS’ main form of communication. 

Worry is often lack of knowledge. The more you know what’s going on, the better equipped you are to solve the issue. Ignoring the problem won’t make it go away – and in fact, it could make it worse. Delays on money owed will just incur more interest and tax penalties, and failing to respond might just mean you lose out on some of the rights you would have to contest IRS decisions. Document everything.

2. Document everything.

Just like any huge, bureaucratic agency, mail can get lost, payments get moved around, and conversations can go undocumented. Your best protection is a complete record of all your correspondences. 

When you mail anything to the IRS, you have the option to send them Certified Mail Return Receipt Requested, which gives you proof of mailing date. Print out all online receipts, and copy anything you get in the mail. When you have a phone conversation with an IRS employee, take note of their name and ID number, the date of the call, and topics discussed. If they agree to anything on the phone, make sure to get it in writing. 

3. Don’t let the IRS file on your behalf.

If you haven’t filed a return in several years, it might be tempting to let the IRS create a Substitute for Return, or SFR, for you and bill you for the balance that they come up with. They’ll do all the heavy lifting and file for you. Problem solved, right? 

Not so much. When they file an SFR for you, they’ll file a return that doesn’t take deductions or dependents into account. For example: they could file your return as Single, even though you’re eligible for Head of Household. Other deductions that aren’t reported to the IRS, like charitable deductions or medical expenses, are left off altogether. 

Filing for an SFR almost guarantees that you’ll owe more than if you filed on your own. Have you already made this mistake? There’s good news! You can have an SFR amended. Contact a professional to reproduce an accurate return.


4. Don’t take “no” for an answer.

Often times, an IRS assessment is not the final word. Buried under a whole lot of legal jargon is the explanation of your right to appeal a report or letter they send you. An appeals conference is an informal meeting when an impartial third party settles a dispute between you, the taxpayer, and the IRS.

But there’s a catch. You must file your appeal within the timeframe that they offer, which is usually 30 days from the date on the letter. (Did we mention it’s important to open your mail?) 

Taxpayers have rights, too. Make sure you know yours. 

5. Don’t try to deal with the IRS on your own. 

If you’re sick, you go to the doctor. If you have a toothache, you go to the dentist. And if you have IRS problems, well, that’s a good time to call in a CPA. Lots of people hesitate to call in the pros to deal with their tax issues because they think it’ll cost too much. You already owe the IRS – so why add professional fees on top of that? 

But that decision could end up costing you significantly. When trying to negotiate with the IRS on your own, you can lose out on benefits and options that you simply weren’t aware of. That means that you could end up paying more than you really needed to. The number one goal of IRS employees is to collect what you owe, and close the file. A CPA’s job is to find the most favorable outcome for you. Getting in touch with one can save you money in the long run. 


If you need us, we’re happy to help. Get in touch with Culpepper CPA here

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