{"id":753,"date":"2013-05-09T15:25:00","date_gmt":"2015-11-25T18:13:17","guid":{"rendered":"\/what-do-if-irs-challenges-your-tax-returns"},"modified":"2025-02-10T12:41:21","modified_gmt":"2025-02-10T20:41:21","slug":"what-do-if-irs-challenges-your-tax-returns","status":"publish","type":"post","link":"https:\/\/www.irs.com\/en\/what-do-if-irs-challenges-your-tax-returns\/","title":{"rendered":"What to do if the IRS challenges your tax returns"},"content":{"rendered":"

When I get a letter from the IRS\u00a0<\/span>\u2014<\/span>\u00a0and yes, it\u2019s happened\u00a0<\/span>\u2014<\/span>\u00a0I get a chill. Am I in trouble? Did I miss a deadline or overlook a tax? I hate to open the envelope.<\/span><\/p>\n

But you’ve got to open it and face the question right away. If you throw the envelope into a drawer, you\u2019ll soon get another one, and then another. If taxes are due, the interest and penalties will keep piling up.<\/p>\n

READ: Do you suffer from Taxpayer Anxiety Disorder?<\/a><\/p>\n

As a practical matter, most of these \u201cchallenge\u201d letters from the IRS turn out not to be big deals. The entire audit probably can be handled by mail (called a \u201ccorrespondence audit\u201d). The letter asks you to substantiate a deduction or inquires about 1099 income you might have overlooked. You\u2019re told what documents are needed to prove your claim, where to send them and who to call if you have questions..<\/p>\n

All you have to do is keep your cool and send the IRS what it asks for. If you have the records that back you up, your case will be closed. If you made a mistake when preparing your returns, and owe extra money in tax, you can handle that by mail, too. When you speak with the IRS contact by phone, take notes of the conversation and get his or her name and badge number, in case you need a follow-up.<\/p>\n

Sometimes the IRS sends you good news, such as a tax credit<\/a> that you overlooked. Or, it gets wrong information from a third party, such as an employer or the trustee that handles your Individual Retirement Account. Once you straighten out the paperwork, the IRS will go away.<\/p>\n

If a professional prepared your tax returns, he or she should handle the IRS\u2019s question without charge. If you used an online tax-filing program such as TurboTax, you can get free guidance on what to do next. If the matter is complicated, however, and the IRS is asking for a large sum, you should find an accountant to defend you.<\/p>\n

READ: Smart ways to get ready for next year’s tax season<\/a><\/p>\n

The IRS rarely sends agents on personal calls. Sometimes there are \u201cdesk audits,\u201d where you\u2019re asked to bring proof of certain income and expenses to an IRS office. Usually, desk audits are for questions about small business returns<\/a>.<\/p>\n

By the way, if your audit shows that you owe more taxes on your federal return, take a look at your state tax return, too. You might have to amend it. Otherwise, the state could come at you in a year or two, looking for unpaid tax plus interest and penalties.<\/p>\n

One warning: Don\u2019t reply to what looks like an email from the IRS, saying that you\u2019re up for an audit or have an old refund that you never collected. The email will ask you for personal information. That tells you it\u2019s a scam.<\/p>\n

The IRS will never, never, never make the first contact by email. If something like that shows up in your mailbox, don\u2019t even click on it. Delete and forget.<\/p>\n","protected":false},"excerpt":{"rendered":"

When I get a letter from the IRS\u00a0\u2014\u00a0and yes, it\u2019s happened\u00a0\u2014\u00a0I get a chill. Am I in trouble? Did I miss a deadline or overlook a tax? I hate to open the envelope. But you’ve got to open it and face the question right away. If you throw the envelope into a drawer, you\u2019ll soon […]<\/p>\n","protected":false},"author":1,"featured_media":754,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[174],"tags":[],"class_list":["post-753","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-audits"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/753","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/comments?post=753"}],"version-history":[{"count":2,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/753\/revisions"}],"predecessor-version":[{"id":9408,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/posts\/753\/revisions\/9408"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media\/754"}],"wp:attachment":[{"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/media?parent=753"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/categories?post=753"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irs.com\/en\/wp-json\/wp\/v2\/tags?post=753"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}