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What to Do When IRS Sends You Certified Mail

Jan 5, 2008
Few people are happy or are looking forward to receive a communication from IRS. However, most people as a reflex action pick up the phone and call them personally, thinking, since it's about their tax situation they are the best people to answer IRSs queries.

Please remember that IRS may ask you a series of questions depending on your status as a taxpayer. If you are a wage earner or self-employed the questions might be on the number of employees, accounts receivables, employer's name, spouse's employer's name, other income information, types of bank accounts with account balances, credit cards held Investments, Life insurances policies, assets and liabilities, and monthly income and expense analysis. In short they may ask you to complete form 433 A or 433 B. on the phone. This might sound pretty straightforward but remember that lying to a Federal Agent is a serious crime and IRS is a federal agency.

If you are tempted to say that you do not have a bank account, give your old bank account details, or incorrect income information you have committed a serious crime.

Tax professionals recommend that the individuals should not contact or communicate with the IRS directly. A Tax professional feigning ignorance about the client's bank details is more likely to be believed. No matter how much you understand tax issues if IRS sends you a CP 2000 it is strongly recommended to seek an appointment with your nearest certified Tax Professional as answering all their questions yourself could result in a higher tax liability.

The reason you got the CP2000 is because the income, deduction, credit information and other details you mentioned in form 1040 does not match the information they have on you. This is also called as the paper audit. This notice is usually five or six pages and will clearly indicate the tax due to the IRS or the tax refund due to you. Review the tax information in the tax returns you filed with the IRS and compare it with the information in the notice. If you find the correction made by the IRS is correct and agree, no reply is needed all you need to do is pay the difference within the due date or there will be penalty and interest on the amount due. In case you do not agree with the correction, respond immediately to the notice with the reasons why you disagree.

Off late as a public relation exercise the IRS has become friendly and the demeanor is not as intimidating as in the past. However, this kindness should not be misconstrued as weakness. If your paycheck is deposited in your checking account directly then there is a chance that you may find your balance as zero in spite of the 30 days notice of intent to levy, issued by the IRS.

In case a tax refund is due to you as a result of tax adjustment it will be sent to you provided no other taxes such as child support, student loans, etc are owed by you. Tax refund due, should be received by you within six weeks of the tax notice.
About the Author
Sacramento CPA Firm Murray and Young can help you with Tax Planning and IRS Representation services. You do not have to be afraid anymore. For 2008 Tax tips visit our website: http://www.april15.com.
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