How to Solve IRS Tax Problems
IRS problems are extremely unsettling. While you are likely to feel panicked and overwhelmed, following the steps below will assist in solving your tax issues in a timely fashion. Do not let a notice from the IRS sit around without taking action. The notice will contain a payoff date for any liability noted. A timely resolution to your problems is crucial to minimize the effect of penalties and interest on this any money you owe.
Other People Are Reading
Things You'll Need
- IRS notice
- Tax return referred to in the IRS notice
- Documents to support your tax return
- Phone number for a CPA
- Paper
- Pen
- Calculator
Instructions
-
Confront and Solve the Problem
-
1
Read the IRS notice several times. The notice will be difficult to fully understand if you read it only once. Make notes on what the IRS is asking for, including the tax year the notice refers to, the specific issue in dispute and the payment requested to satisfy the liability.
-
2
Review and compare the items in question in the IRS notice with the tax return you filed for that year. Call your CPA to discuss the notice you received and set up a meeting to review the issue. Prior to meeting with your CPA, complete and mail/fax an IRS power of attorney, Form 2848, to your CPA. This will ensure that the CPA will have authority to act and speak on your behalf to the IRS regarding the issue at hand.
-
-
3
Consider calling the IRS agent listed on your notice prior to meeting with your CPA. Contact information will be listed in the top right-hand corner of the notice. While speaking with the agent, write down the date and time you called, whom you spoke to and the details of the conversation. Every IRS agent has an agent number that he will provide when identifying himself. Do not be afraid to ask the agent to repeat this number if you don't hear it the first time. This information is as important as the agent's name in identifying who gave you advice.
-
4
When meeting with your CPA, bring the IRS notice, the notes you made regarding the issue in dispute and any notes from conversations you had with an agent at the IRS. To assist the CPA, also bring any documentation that you think will clarify the issue the IRS raised. For example, say the IRS notice states that funds were withdrawn from your 401K and therefore should be counted as income; however, you simply rolled over the 401K into another 401K in a tax-free transaction. In this case, you should be sure to bring the forms that show the rollover was tax-free to the meeting with your CPA.
-
1
Tips & Warnings
If you are not able to satisfy your tax liability in one payment in 120 days, you can request to set up a monthly installment plan by completing IRS Form 9465.
After you have met with your CPA about your IRS issue, you will need to pay the liability. The original liability may have been reduced or a portion of the penalties and interest may have been waived. However, if you do not satisfy the liability, a warrant will be put out by the IRS. IRS warrants take time and money to clear since liens are put on your assets.
