December 09th, 2015
TAX TIP OF THE DAY... how to beat IRS letters.
1) Understand that most IRS letters are incorrect. You don't owe $5,122.
2) Don't waste time calling. Respond in WRITING.
3) Be a brat. Keep responding with the same answer until you get your way.
4) Don't get bullied! Sometimes it takes 4 letters to get your way.
5) DO NOT PAY. Let them adjust for your comments and rebill if you still owe.
6) Skim the 8 page letter looking for the 1 paragraph that states what their problem is. Are they right, wrong, or partially right?
7) If this is a simple matter, respond with your explanation. Keep your response simple and all taxpayers should sign and date.
8) Request penalty abatement even if you were wrong and owe them tax. SECRET WEAPON: If you have not had IRS penalties over the past 3 years, you qualify for the "first-time penalty abatement" provision. The IRS will not offer this UNLESS YOU ASK FOR IT.
This post refers specifically to IRS letters... not PA or Local tax letters which have different strategies. For more complicated matters, get professional help.
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If you need any help... www.baboiancpa.com
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David S. Baboian, CPA