What Not to Do When You Get an IRS Letter

Receiving an envelope from the IRS or your state tax agency can be nerve-wracking. The official logo, the technical language, and the unsettling feeling that something isn’t right can cause stress. However, before reacting hastily, it’s critical to take a moment to breathe.

The anxiety surrounding IRS and state tax notices often stems not from the letters themselves but from how quickly individuals respond to them. Here’s a counterintuitive guide on what not to do if you receive a tax notice—and why taking your time is important.

Don’t Immediately Assume Wrongdoing

Tax agencies issue millions of notices annually, many of which are:

  • Requests for additional details
  • Notification of automated discrepancies
  • Follow-ups on missing data
  • Balance statements not accounting for recent payments

A notice is not an accusation; it’s often a system-generated request for confirmation or correction. Jumping to negative conclusions only heightens anxiety and doesn’t provide a solution.

Don’t Disregard the Notice

Failing to address a notice is one of the quickest routes to escalating a minor issue into a major one. Ignored notices can lead to:

  • Missed deadlines
  • Accumulation of penalties and interest
  • Limited options for resolution

This is applicable to both IRS and state agencies. In some cases, state agencies may pursue missed deadlines more swiftly and assertively than the IRS.

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Avoid Calling Without a Strategy

It may come as a surprise, but contacting the IRS or state agency without fully grasping the notice can:

  • Solidify inaccurate assumptions
  • Lead to incomplete or contradictory explanations
  • Aggravate matters if the issue is more intricate than it appears

Tax agencies function based on procedures, not personal circumstances. Approaching them unprepared can result in confusion, rather than clarity.

Avoid Sending Payments to "Resolve It" Hastily

This is one of the most prevalent—and consequential—errors.

Sending money without confirming the notice specifics can result in:

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  • Excessive payment
  • Overlooking potential credits or adjustments
  • Forfeiting the chance to contest inaccuracies

After a payment is made, rectifying errors becomes far more challenging.

Avoid Filing an Amended Return Out of Panic

There is a time and place for amended returns, but acting rashly can be detrimental. Amendments:

  • Require considerable processing time
  • May prompt additional scrutiny
  • Could introduce new complications if not filed correctly

Filing amendments should be a calculated decision, rather than an emotional one.

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Recognize When to Seek Professional Help

While some notices are straightforward, others are not. What appears to be a slight discrepancy can indicate:

  • Issues with withholding
  • Reporting mismatches
  • Problems with estimated taxes
  • Error carryovers from prior years

Taking on everything independently can be stressful—particularly when factoring in deadlines and enforcement timelines.

Recommended Steps Instead

The ideal approach often involves three essential actions:

  1. Carefully reading the notice
  2. Understanding the specific request from the agency
  3. Providing a timely and precise response

This process is much simpler with professional guidance, especially when emotions run high.

The Conclusion

Receiving a tax notice from the IRS or state is unsettling, but it doesn’t have to be overwhelming. Most complications arise not from the notice itself, but from panic, assumptions, or hasty reactions.

If you have received a tax notice, contact our office before taking any action. Current clients who involve us early benefit from our ability to review the notice, verify requests, and mitigate stress effectively.

Important Note

This article is intended for general educational purposes only. It is not legal advice. Tax notices vary, and individual circumstances matter. For legal guidance, consult a qualified attorney. For assistance responding to IRS or state tax notices, contact your tax professional.

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You can count on us for professional guidance along with timely, and reliable tax services. If you’re ready to get started, or just want to start a conversation, then click below.
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