Letter from the IRS? Don’t Panic!

Letter from the IRS? Don't Panic! By Stephen J. Ganns, CPA{3:48 minutes to read} The IRS mails many notices and letters to taxpayers each year. There are a variety of reasons why this might happen. Here are some things you should know in case you receive one.

First, do not panic. You can often take care of any notice by simply responding to it. The IRS notice will usually be about a specific issue on your Federal tax return and/or tax account, such as: 

  • You forgot to report a bank account that the IRS now has a record of; or,
  • You failed to file a return with a small W2 for your child, who had 1 or 2 jobs while he was away at college; or,
  • You failed to record all of your stock and mutual fund sales transactions.

The IRS will pick these things up automatically and send out notices, and each notice will have its own specific instructions. Read it carefully, and it will tell you what you need to do.

Most notices you get from the IRS are because they have changed something on your return based on information they have received from a 3rd party. The wording of the notice will often be “our records indicate that your income based on documents we have was understated or overstated by…” The IRS will then actually correct all the numbers and in the notice, explain that you are either entitled to a small refund (or a large refund, if you’re lucky) or you will owe some money. Always compare the notice to your own records.

Agree or Disagree?

  • If you agree with the notice, you don’t usually need to reply unless it gives you instructions to do so. If you need to make a payment, simply send in the payment as per the instructions on the notice.
  • If you do not agree with the notice, it’s very important to respond. If you think you can handle it yourself, following the instructions on the notice, write a letter explaining the disagreement(s), etc. Usually there is some kind of tear-out portion that you have to include.
  • You may also call your tax preparer and ask them to respond for you. If the reason the IRS is sending you a notice is because the preparer made a mistake, most reputable tax preparers will not charge you for the service. If it’s something you forgot to give to the preparer, you may be charged.

Beware the Tax Scam

The IRS sends dozens of notices by mail to the address they have on record. They do not contact people by email or social media, so please, if you ever get contacted by the IRS through any means other than a letter, it is most likely a scam. Once the IRS has established a case with you as a result of your response to their notice, and they give you someone’s name and/or phone number to call, then of course you may safely respond by phone.

If you have any questions, please consult with your tax preparer or call us at Stephen J. Ganns CPA, 914-682-7007.


Stephen J. Ganns

Stephen J. Ganns, CPA


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