Receive an IRS Letter? Don't Panick...
If you received a letter from the IRS don’t panick. Most IRS letters will tell you in detail why they are reaching out to you. Read the letter thoroughly. If you disagree with the contents of the letter, scan and send us a PDF copy or upload it into your portal and shoot us a quick email. We will review it and get back to you on next steps. Be sure to send the entire letter so we can work through their logic and build a gather data for a response if needed.
If you agree with the letter, go ahead and follow the directions provided within.
Most Common Reasons for IRS Letters
IRS ADJUSTMENTS: Missing Information Leads to Incorrect Calculation on Your Return
The most common reason for an IRS letter is simply that the tax preparer did not receive all of the information needed for a complete return. The IRS gets a copy of every tax document you receive. If your tax preparer is missing any of that information, the IRS will make adjustments to your return based on the information they have. On occasion the situation is reversed and the preparer has information the IRS does not. In this case we can send a letter and proof with request for corrections.
Payments Due but Not Paid
- If quarterly estimates are produced on your return, they are not suggestions; they are due by the due date.
- If you owe taxes; they are due. If you can’t pay them, file for a payment plan.
- If you owe taxes but file an extension; you will still accrue interest on the amount due. You will get a bill.
Other common reasons for an IRS notice are quarterly estimates, taxes due, or other payments that are outstanding.
If you have taxes due or quarterly estimates produced with your tax return and you do not pay them, or pay them on time, you WILL receive a letter, likely with penalties and interest. If you can prove that it was paid, please send us the full IRS letter and proof that the payment cleared your bank account and we will respond to the IRS requesting correction. If you cannot find proof that the payment cleared, chances are it is still outstanding and is due.
Please note: the IRS is no longer accepting checks. All payments must be made digitally.
Incorrect Reporting of Estimated Payments Made
Please be very clear on your provided documentation of the date each payment was made and the amount remitted for all quarterly estimated payments. Our preparation service provides quarterly payment calculations and recommended payment amounts to keep our clients in “Safe Harbor” to avoid penalties. If you did not make the payments or did not make them on time, we need to know. This changes your return. If it is reported incorrectly in your return, you will receive a letter, likely with a balance due.
- Provide proof of each payment confirmation or the payment clearing your bank. Include in your tax documents.
Missouri Tax Credits
When contributing to a non-profit organization that has qualified for Missouri Tax Credits, be sure to obtain their MO-FPT form, SIGNED by a representative of the non-profit. This form must then be signed by the taxpayer and attached to the e-filed return. If this process is not followed, the credit will be disallowed.
Additionally, each non-profit is allowed a set amount of credit dollars per fiscal year (July1 thru June 30). If there are more credits claimed than credit dollars, the amount of credit you claimed on your return will be reduced and you will have either a reduced Missouri refund OR you will owe additional Missouri taxes for the year. In as much as the state uses a fiscal year, if you amend your return after July 1 to request the lost credit dollars, you may receive an additional refund.