Tax Tip

In the past few weeks I’ve talked to a number of people who have received letters from the IRS….Some were in total panic mode others in tears. The fact of the matter is that with IRS budjet cuts and Revenue Agents with case overloads….. The IRS has went to letter audits. They send a letter denying deductions or credits. They give you a multiple choice.
A. Accept their conclusion
B. Disagree with their conclusion.
Pretty clear cut….. If you disagree mark that box. Send them the proof they want with a copy of the documentation they ask for as well as a cover letter asking for your return to be restored to its original status and note the enclosed documentation as proof of valid deduction. ….Problem Solved! …If you can’t prove the deduction …..well …. check the agree box and write a check.
If you don’t know what to do ….seek the advice if a CPA or EA for guidance. DON’T ignore the letter and hope it goes away. It won’t and could cause this year’s tax refund to be held to pay IRS debt. Don’t let something as small as a lost form make a small problem turn into a big problem. Kicking it down the road will only make things worse….. Don’t panic just fix it. It’s not as bad as you think.