Opening a letter from the IRS can be unsettling, especially when you’re not sure what it means or what to do next. With the October 15 tax extension deadline behind us, some taxpayers may be receiving notices related to previously filed returns.
The good news? An IRS letter doesn’t automatically mean you’re being audited. Many notices are routine and can be resolved with a little clarification or additional documentation.
Here’s what to know before you respond.
Not Every IRS Letter Means an Audit
It’s easy to assume the worst when you see an envelope from the IRS, but most notices aren’t related to a formal audit.
Some letters simply request additional information, identify a discrepancy, or notify you of a balance due. If your return has been selected for an audit, the IRS will explain the examination process and what information is needed.
Before worrying about a potential Chattanooga tax audit, take a moment to read the notice carefully and understand exactly what the IRS is requesting.
Common IRS Notices You Might Receive in the Fall
While IRS notices can arrive throughout the year, here are a few you may encounter:
- Request for Additional Information: The IRS may need documentation to verify income, deductions, or credits claimed on your return.
- Balance Due Notice: This indicates an outstanding tax balance, which may include interest or penalties.
- CP2000 Notice: This means information reported by an employer, bank, or other third party doesn’t match what’s on your tax return. It proposes changes but isn’t necessarily an audit.
Each notice includes instructions and, when applicable, a response deadline. Review both carefully before taking action.
Don’t Overlook Response Deadlines
One of the most important things you can do is respond on time. Ignoring a notice can lead to additional penalties, interest, or further collection activity, depending on the circumstances.
If you disagree with the IRS’s findings, you may have an opportunity to provide documentation or dispute the proposed changes. Iif you’re unsure how to proceed, consulting a CPA before responding can help you avoid unnecessary complications.
What Should You Avoid Doing?
If you receive an IRS notice, keep these tips in mind:
- Don’t ignore it. Even routine notices deserve attention.
- Don’t respond without reviewing the details. Understand what’s being requested before sending information.
- Don’t assume every communication is legitimate. Be cautious of unexpected calls, emails, or texts claiming to be from the IRS.
When Should You Contact a CPA?
Whether you’re facing a potential audit, questioning a tax adjustment, or simply need help understanding a notice, professional guidance can make the process easier.
Since 1977, JHM Certified Public Accountants has helped individuals and businesses navigate tax matters with confidence. If you’re looking for a CPA in Chattanooga or a CPA in Cleveland, TN, our team is here to help you understand your options and determine the next steps.
Contact JHM Certified Public Accountants to speak with our team about your IRS notice.