I Received an IRS Audit or Collection Letter – What Should I do?

Posted by Siegel Tax Law on May 30, 2012

A common first reaction to an Internal Revenue Service audit or collection letter is panic, followed closely by throwing the letter into a pile of unread mail. This is a big mistake. The IRS is trying to tell you something and will let you know the reason for the audit or collection notice in the letter. The sooner you act, the sooner it can be resolved, reducing potential interest and penalties you owe.

You Are About to be Audited. Now What?

The IRS audits taxpayers for various reasons. Sometimes, you are just the lucky random taxpayer. Other times, there are discrepancies on your return. The IRS letter should state why you’ve been audited and what actions you need to take. Generally, the letter will state:

  • The time and place of the audit, if a meeting is necessary; and,
  • What documents you’ll need to provide the IRS

If you need more time, ask for it. You will get a reasonable extension. The most important part of an audit is gathering the documentation. It is generally unwise to just agree to a settlement to get it out of the way. You have a right to professional representation through the audit process, and some choose to go through audits with an experienced attorney.

Dealing with IRS Collections

A taxpayer may receive collection notices from the IRS. The IRS will send notices to taxpayers who have failed to file or are late on payments. If the issue is not resolved, the IRS may levy wages, assets or property. The notice is important. Read it! The notice will tell you what the problem is. It will give you a number to call if you need more time to get professional help from a tax relief attorney. Even if you know you owe the taxes, the professional representation can help reduce the amount or get you time to pay it off and prevent levies and garnishments. You have rights and a tax lawyer can go over those with you.

The IRS has an appeals process if you are not getting results. A well-prepared appeal can often help you get the relief you need.

If you are receiving letters from the IRS, you may want to contact a tax attorney to help you navigate the process. Help with collections, audits, appeals and tax relief like an Offer-in-Compromise can greatly reduce the stress associated with disputes with the IRS, and can sometimes reduce the amount owed. The IRS will always be easier to deal with if you do not ignore them. They will work with you. Get the IRS help you need and call a taxation attorney for tax resolution assistance.