Unless you are anticipating a refund from the IRS, receiving an envelope from the IRS in the mail can be a cause for panic. So what should you do if you receive a notice from the IRS?

First, you should open the envelope and read the notice. Take note of the date that an assessed payment is due. This may seem obvious, but we have received unopened IRS notices where a payment was already past due.

Second, send the notice to our office before you make any payments. IRS notices are frequently incorrect. It may simply be a matter of providing additional information to satisfy the insufficiency.

Sometimes payments are misapplied to another account. It is much easier to communicate with the IRS and provide information and explanations than to try to recover money paid erroneously based upon their notice. Sometimes amounts due are small and it is not economically feasible to pay a professional to sort out the facts. But sometimes though the amount may be small, the underlying cause for the notice must be corrected to prevent continuing errors in the future. An example would be payroll deposits that are misapplied. An error one period may carry over to another period causing continuing error notices.

Third, if it is determined that the assessment is correct, pay the amount due in full prior to the due date. Interest on additional assessments continues to accrue on a daily basis until paid in full.

If you receive a refund that you were not anticipating, you should determine the reason for the refund. Contact our office before you deposit the check to determine if it is rightfully yours. Even if it is an IRS error you are obligated to return the money and can be prosecuted for failure to do so.

Whatever the reason for your notice from the IRS, or any other taxing authority, it is important to respond to the notice. Failure to communicate compounds the issue. Timely response, correctly documented often solves the issue.