So, you got a letter from the IRS. It is just sitting there on top of the other mail. Unopened. You eye is twitching. What do you do now? The answer is as simple as it is obvious - open it! The end might not be near.
The IRS made a major effort to automate its tax collection methods over the last 20 years. This initially resulted in total chaos as the effort to computerize the complicated methodology of the IRS was brutally difficult. Slowly, but sure, however, the system has been put together. Why should you care? This has a lot to do with that letter sitting on your table.
The vast majority of correspondence you receive from the IRS is automated mail. What do I mean by this? The computer system kicks out letters that no live person at the IRS sees. It may be a notice that your tax return was not received. It might be a notice that the return was received, but there was an error in math and you are due or owe some money. It might simply be a reminder about something.
The bigger point is very few of these computer generated letters are indicative of a large audit. Most are simply minor things that can be handled over the phone or through a letter. Of interest, the letters that ask for more money or information are actually considered audits by the IRS and counted as much in IRS audit rates. Technically, this means when you get a letter saying you own $19.23 and you send in a check, you've just been audited! Now, that wasn't too bad was it?
The biggest issue that most taxpayers run into with letters from the IRS is the Ostrich Effect. Instead of dealing with the letters, they just don't open them and procrastinate. Do this enough and you may very well raise the ire of the IRS. That is just about the last thing you ever want to do. If you get a letter from the agency, open it up. It usually is a minor matter you can deal with quickly and, most importantly, painlessly.
The IRS made a major effort to automate its tax collection methods over the last 20 years. This initially resulted in total chaos as the effort to computerize the complicated methodology of the IRS was brutally difficult. Slowly, but sure, however, the system has been put together. Why should you care? This has a lot to do with that letter sitting on your table.
The vast majority of correspondence you receive from the IRS is automated mail. What do I mean by this? The computer system kicks out letters that no live person at the IRS sees. It may be a notice that your tax return was not received. It might be a notice that the return was received, but there was an error in math and you are due or owe some money. It might simply be a reminder about something.
The bigger point is very few of these computer generated letters are indicative of a large audit. Most are simply minor things that can be handled over the phone or through a letter. Of interest, the letters that ask for more money or information are actually considered audits by the IRS and counted as much in IRS audit rates. Technically, this means when you get a letter saying you own $19.23 and you send in a check, you've just been audited! Now, that wasn't too bad was it?
The biggest issue that most taxpayers run into with letters from the IRS is the Ostrich Effect. Instead of dealing with the letters, they just don't open them and procrastinate. Do this enough and you may very well raise the ire of the IRS. That is just about the last thing you ever want to do. If you get a letter from the agency, open it up. It usually is a minor matter you can deal with quickly and, most importantly, painlessly.