Receiving a package from the IRS can certainly trigger a mix of emotions, from curiosity to concern. While it's natural to feel a bit apprehensive, remember that not every piece of mail from the IRS spells trouble. In fact, many are routine and simply provide information or request clarification.
So, let's embark on a journey to understand exactly why you might be getting a package from the IRS and, more importantly, what to do next.
Step 1: Don't Panic – Engage and Evaluate!
First things first, take a deep breath. Getting mail from the IRS isn't necessarily a bad sign. It's crucial to approach this with a clear head. Instead of shoving the package aside or immediately jumping to conclusions, let's actively engage with the situation.
- What's your initial reaction? Are you worried about an audit? Hoping for a refund? Acknowledging your feelings can help you stay calm and proceed rationally.
- Remember, the IRS communicates primarily by mail. They generally do not initiate contact by email, text message, or social media to request personal or financial information. If you get something that seems off, it's a major red flag.
Step 2: Verify the Legitimacy of the Package
Before you do anything else, you need to confirm that the package is genuinely from the IRS and not a scam. Unfortunately, scammers often impersonate the IRS to trick people.
Sub-heading: Key Indicators of a Legitimate IRS Package
- Official Letterhead and Logo: Look for the official IRS logo and letterhead. While scammers can replicate these, often there are subtle differences.
- Correct Address and Contact Information: The return address should be a legitimate IRS address, and any phone numbers provided should match those found on the official IRS website (IRS.gov). Do not call a number provided in the package without verifying it first.
- Specific, Detailed Information: Legitimate IRS correspondence will usually refer to specific tax years, your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), and a clear reason for contact. Scam letters tend to be vague and lack these precise details.
- Professional Tone and Grammar: Official IRS letters are typically professionally written, without typos, grammatical errors, or unusual fonts. Scammers often make these mistakes.
- No Immediate Threats or Demands for Unusual Payment: The IRS will never demand immediate payment via unusual methods like gift cards, wire transfers, or cryptocurrency. They also won't threaten immediate arrest or deportation for unpaid taxes. They will always offer payment options and an appeals process.
- Notice/Letter Number: Most IRS notices and letters have a specific notice number (e.g., CP14, CP2000, Letter 5071C) located at the top or bottom. You can often look up these numbers on IRS.gov to understand their purpose.
Sub-heading: What to Do If You Suspect a Scam
If anything about the package feels suspicious:
- Do NOT respond to it.
- Do NOT call any phone numbers listed in the package.
- Do NOT click on any links if it's an email (though the IRS rarely emails unprompted).
- Verify with the IRS directly: The safest way to verify is to visit IRS.gov directly or call the IRS main phone line (often 1-800-829-1040 for individuals, but check IRS.gov for the correct number for your specific issue).
- Report the scam: You can report IRS impersonation scams to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 or online. You can also forward suspicious emails to phishing@irs.gov.
Step 3: Understand the Common Reasons for an IRS Package
Once you've confirmed the package is legitimate, the next step is to understand why you received it. The IRS sends packages and letters for various reasons, most of which are routine.
Sub-heading: Reasons Related to Your Tax Return or Account
- Balance Due: Perhaps you owe more taxes than you paid, or there was a miscalculation on your return. The package will detail the amount owed, the reason, and how to pay. Examples: Notice CP14 (First Notice of Balance Due), CP501 (Balance Due).
- Adjustments to Your Return: The IRS may have found a discrepancy between what you reported and what they have on file (e.g., income reported by an employer or bank). They will propose changes to your tax liability. Example: Notice CP2000 (Underreporter Inquiry).
- Refund Adjustments or Delays: Your refund might be larger or smaller than expected, or there could be a delay in processing. The package will explain why. Example: Notice CP12 (Refund Adjusted).
- Missing Information: The IRS might need more information to process your return or account.
- Identity Verification: This is a common reason, especially if a suspicious return was filed using your SSN. The IRS will need to verify your identity before processing the return or issuing a refund. Examples: Letter 5071C, Letter 4883C. This is a protective measure against identity theft.
- Audit Notification: While less common, the IRS may be initiating an audit of your tax return. The package will clearly state this and explain the scope of the audit. Example: Letter 566 (Audit Notification).
- Confirmation of Changes or Requests: If you've recently updated your address, requested a transcript, or made other changes, the IRS might send a confirmation.
Sub-heading: Reasons Related to Collection Actions
If you have outstanding tax debt, the IRS may send packages related to collection activities. These are serious and require prompt attention.
- Notice of Intent to Levy or Lien: The IRS may inform you of their intent to place a levy on your wages or bank accounts, or a lien on your property, if you don't address your unpaid taxes. Example: Notice CP504 (Notice of Intent to Levy).
Step 4: Carefully Read and Understand the Contents
This is the most critical step. Do not skim the document. Read every word, including the fine print.
Sub-heading: What to Look For When Reading
- The Reason for Contact: This should be clearly stated near the beginning of the letter.
- The Tax Year(s) Involved: Ensure the notice pertains to the correct tax year(s).
- The Amount Due or Proposed Change: Understand the figures and how they were derived.
- Required Action and Due Date: The package will specify what the IRS wants you to do and by when. Pay close attention to deadlines. Ignoring IRS correspondence can lead to penalties and further action.
- Your Rights and Options: The IRS is required to inform you of your rights as a taxpayer, including how to dispute their findings or set up a payment plan.
- Supporting Documents Requested: If they are asking for additional information, they will list the specific documents needed.
Sub-heading: Don't Understand? Seek Professional Help!
If you find the language confusing, or if the situation seems complex (e.g., a large balance due, an audit notification, or identity theft), do not hesitate to consult a qualified tax professional. This could be:
- A Certified Public Accountant (CPA)
- An Enrolled Agent (EA)
- A Tax Attorney
They can help you understand the notice, advise you on the best course of action, and even represent you in communication with the IRS.
Step 5: Take Prompt and Appropriate Action
Once you understand the package, it's time to act. Procrastination can lead to additional penalties and interest.
Sub-heading: If You Agree with the IRS
- Pay the Balance Due: If you owe money and agree with the amount, follow the payment instructions provided. You can typically pay online, by mail, or through various other methods. Even if you can't pay the full amount, pay what you can to minimize penalties.
- Make Necessary Corrections: If the IRS corrected an error on your return and you agree, simply keep the letter for your records. You generally don't need to respond unless instructed to do so.
Sub-heading: If You Disagree with the IRS
- Gather Supporting Documentation: If you believe the IRS is incorrect, collect all relevant documents that support your position (e.g., receipts, bank statements, W-2s, 1099s, previous tax returns).
- Write a Clear and Concise Response: Draft a letter explaining why you disagree, referencing the specific notice or letter number and tax year. Clearly state the facts and include copies of your supporting documents. Do not send original documents.
- Mail Your Response by the Due Date: Send your response via certified mail with a return receipt requested. This provides proof that you sent it and when.
- Consider Professional Assistance: For complex disagreements, a tax professional can help you formulate your response and represent your case.
Sub-heading: If Identity Verification is Required
- Follow the Instructions Precisely: The letter will outline specific steps to verify your identity, often through an online tool or a toll-free number. Have the letter and any requested prior-year tax returns and supporting documents ready.
- Be Patient: Identity verification can sometimes take a while, especially if the IRS is dealing with a backlog of identity theft cases.
Step 6: Keep Detailed Records
Always keep a copy of any correspondence you receive from the IRS, along with your response and any supporting documents. This creates a clear paper trail and is essential for your records, especially if you need to refer back to it in the future or if there are further communications. The general recommendation is to keep tax records for at least three years from the date you filed your return.
10 Related FAQ Questions
Here are 10 frequently asked questions, starting with "How to," along with their quick answers:
How to know if an IRS package is legitimate?
Look for an official IRS logo, correct contact information matching IRS.gov, specific details about your tax account, and a professional tone. The IRS will never demand immediate payment via gift cards or threaten immediate arrest.
How to respond to an IRS notice if I disagree?
Gather supporting documents, write a clear letter explaining your disagreement, include copies of your evidence, and mail it via certified mail with a return receipt by the due date.
How to pay a balance due to the IRS?
The IRS package will provide payment instructions. You can typically pay online via IRS Direct Pay, through your tax software, by mail with a check or money order, or through other authorized payment options listed on IRS.gov.
How to verify my identity with the IRS if requested?
Follow the specific instructions in the IRS letter (e.g., Letter 5071C or 4883C), which usually direct you to an online tool or a dedicated toll-free number. Have the letter and relevant tax information ready.
How to find out what type of IRS notice I received?
Look for a notice or letter number (e.g., CP14, CP2000, Letter 5071C) usually found at the top or bottom of the correspondence. You can then search for this number on IRS.gov for an explanation.
How to get help understanding an IRS package?
If you don't understand the notice, consider consulting a tax professional like a CPA, Enrolled Agent, or tax attorney. You can also try calling the IRS directly using the phone number provided on the official IRS website (IRS.gov).
How to report an IRS scam?
Report IRS impersonation scams to the Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 or via their website. You can also forward suspicious emails to phishing@irs.gov.
How to deal with an IRS audit notification?
Do not ignore it. Carefully read the audit letter, gather all requested documents, and consider seeking assistance from a tax professional who can represent you during the audit process.
How to get a copy of my tax transcript from the IRS?
You can request a tax transcript online via IRS.gov using the "Get Transcript Online" tool, by mail using Form 4506-T, or by phone.
How to update my address with the IRS?
You can generally notify the IRS of an address change by filing Form 8822, Change of Address, or by writing a letter to the IRS service center where you filed your last return.
