Received an IRS Notice

Yesterday, I received an IRS notice regarding our 2019 tax return.  Finally.  I filed the return in April 2020.   Due to COVID shutdowns, the IRS did not acknowledge receipt until August 2020.   In September 2020, I called regarding status and was informed that the IRS was issuing a notice on our 2019 tax return.

I thought I knew the reason, but decided to wait for the notice rather than preempt it, due Strategy #3 below.

Here is my strategy for dealing with IRS notices:

1. Keep calm.  Read the letter and understand the IRS conclusion and any requests.
2. Assume the IRS conclusion may be incorrect due to lack of complete information.  In my experience, IRS notices are usually wrong in the favor of the IRS about 80% of time.
3. Determine what's needed to satisfy the request and provide ONLY that information to the IRS.  DO NOT provide extra information that was not requested.
4. Respond quickly, within a day or two.  

As I suspected, the request was for a form that I didn't submit.   It was a new form in 2019 used to calculated a number that the taxpayer previously did on his own without the form.  I filled out the form and sent it in with a copy of the notice letter today.

Hopefully, this will satisfy the IRS and my refund will be issued in 6-8 weeks. I will likely get interest from April 2020 at 3% on the refund amount.  Better than bank interest.

Disclosure:  I was a tax preparer for 5 years and still do my own taxes by hand.

For more on Ideas You Can Use, check back Tuesdays for a new segment.

This is not financial nor tax advice. Please consult a professional advisor.

Copyright © 2020 Achievement Catalyst, LLC