What happens if you open your mailbox to find a letter from the IRS claiming you owe back taxes? If you believe you have been diligent in your tax responsibilities, you may feel some panic and wonder what you should do.
Misunderstandings and clerical errors can occur in any organization; The IRS is no exception. While it might seem daunting to challenge such a formidable institution, knowing the correct steps to take can help you address and rectify the situation.
Review your tax records
Thoroughly review your tax records for the year in question. Ensure that you have copies of all filed returns, W-2s, 1099s and any relevant receipts or deductions, as these documents are evidence that you fulfilled your tax obligations correctly.
Contact the IRS
Communicate with the IRS as soon as you are able to identify the discrepancy if there is one. Explain the situation succinctly and provide any necessary details. Remember, ignoring the problem will not make it go away, so the sooner you address the issue, the quicker it can get resolved.
Request a transcript
You can ask the IRS for a transcript of your account. This document will provide a detailed record of all transactions, payments, penalties and interest. Comparing this transcript with your records can help identify where the error occurred.
File an amended return if necessary
If after reviewing everything, you discover an error in your original tax return, you have the option to file a Form 1040-X, Amended U.S. Individual Income Tax. This step will correct any mistakes and provide clarity on what you truly owe, if anything.
Stay calm and patient
Although dealing with tax issues can be stressful, try to remain calm and patient. The IRS handles numerous cases, and it may take time to get to yours. Regularly follow up, stay organized and keep all correspondence.
Facing an unexpected tax bill from the IRS can be unnerving. However, by paying careful attention to detail and taking proactive steps, you can navigate this challenge.