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Not all letters from the IRS contain bad news. In fact, it’s usually pretty ordinary.
Key points
- The IRS frequently sends a letter to clarify a simple issue.
- If the facts contained in a letter are wrong, there’s a system in place to disagree and appeal.
It’s no wonder that some people panic upon receiving a letter from the IRS. After all, we’ve all heard horror stories about how the IRS has turned lives inside-out in an effort to collect money. Here’s a not-so-well-known secret: The IRS is not the bad guy. In fact, as long as you show a good-faith effort, the IRS is relatively easy to work with. We’ll touch on this a bit more in a moment. First, let’s look at four letters you might receive and the best moves to make once you have one in hand.
Read more: 4 Ways to Save Money on Your 2021 Taxes
1. You have a balance due
When you consider the number of math calculations included in a single tax return, you realize how easy it would be for you, your representative, or the IRS to get one (or more) of the calculations wrong. It happens. And typically, when the mistake is yours, it doesn’t end up changing your return by much.
The thing about receiving such a letter is…
