An IRS Letter in Your Mailbox? Don't Panic. Here's What to Do.
There are few things that can make your heart skip a beat quite like seeing the official seal of the Internal Revenue Service on an envelope in your mailbox. Your mind might immediately jump to the worst-case scenario. But as your local South Jersey tax preparation experts, we at KBI Consulting are here to tell you the most important first step: don't panic.
Most IRS letters are not about audits or criminal investigations. They are often simple, automated notices about a wide range of issues that can be resolved clearly and efficiently. This guide will help you understand what to do when you receive an IRS notice and why partnering with a local tax professional can be your best move.
Your Immediate First Steps
Before you do anything else, take a deep breath and follow these initial steps:
Do Not Ignore It: This is the golden rule. Ignoring an IRS notice will only make the situation worse. Penalties and interest can accumulate, and a minor issue can escalate into a much larger problem.
Read the Entire Letter Carefully: Open the letter and read it from top to bottom. The notice will explain exactly why the IRS is contacting you. Look for key information like the notice number (e.g., CP2000, LT11), the tax year in question, and any response deadlines.
Compare the Notice with Your Tax Return: Pull out your copy of the tax return for the year mentioned in the notice. Compare the information on the notice with what you filed. This will help you understand the discrepancy the IRS has identified.
Common IRS Notices Decoded for South Jersey Taxpayers
While there are many types of IRS notices, here are a few of the most common ones our clients in South Jersey bring to us:
CP2000 Notice (Proposed Changes to Your Return): This is not a bill or a formal audit. It means the income and/or payment information the IRS has on file from third parties (like your employer's W-2 or a bank's 1099-INT) doesn't match the information you reported on your tax return.
CP2501 Notice (Request for Information): The IRS sends this notice when they need more information to verify certain items on your return, like deductions or credits you claimed. You are not being assessed a tax at this point; they are simply asking for clarification.
Math Error Notices (e.g., CP11, CP12): These notices inform you that the IRS corrected a mathematical error on your return. The notice will explain the changes and their impact on your refund or balance due.
CP504 (Notice of Intent to Levy): This is a more serious notice. It informs you that the IRS intends to levy (seize) your assets if you don't pay your overdue taxes. If you receive this, it is critical to seek professional help immediately.
How to Respond to an IRS Notice
Once you understand the notice, your response is key.
If You Agree with the Notice: If you review the notice and your tax return and find the IRS is correct, you typically need to sign the response form and pay the amount owed by the due date. You can usually pay online directly to the IRS.
If You Disagree with the Notice: This is where professional guidance becomes invaluable. You will need to write a letter explaining why you disagree and provide supporting documentation to prove your case. Your response must be clear, concise, and sent to the address indicated on the notice by the deadline, preferably via certified mail.
When to Call Your Tax Professional
While you can handle some simple notices on your own, calling a professional is often the wisest decision. You should contact a tax expert if:
You don't understand the notice.
The notice involves a large sum of money.
You disagree with the IRS's findings.
You are being audited or receive a serious notice like a CP504.
You simply don't have the time or confidence to deal with the IRS directly.
As your Haddonfield tax preparation firm, we have the experience to communicate effectively with the IRS on your behalf. We can help you draft a professional response, ensure all deadlines are met, and work to resolve the issue in the most favorable way possible, saving you time and immense stress.
Don't Face the IRS Alone – KBI Consulting is Here to Help
Receiving an IRS notice doesn't have to be a stressful ordeal. For residents and businesses in Haddonfield, Cherry Hill, and across Camden County and Southern New Jersey, professional help is right around the corner.
Before you spend hours on the phone with the IRS, contact KBI Consulting. We'll review your notice, explain your options, and provide the expert representation you need to resolve the matter with confidence.
Contact KBI Consulting today at (610) 420-4952 or visit our website for expert IRS notice assistance in West Chester, PA & Haddonfield, NJ.
