Here’s Why Ignoring This Letter From the IRS Could Be a Big Mistake

Ivan-balvan /

Given the complexities of tax filing season, most taxpayers shouldn’t be surprised — or necessarily worried — if they receive an adjustment letter from the Internal Revenue Service (IRS).

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An adjustment letter usually concerns itself with detailing incorrect information entered on your filing. Said information can be contested in a dispute if you feel an error has been made, and the IRS will provide all information within the letter in terms of disputing any adjustment made. Additional taxes may be owed, or in some cases, your refund may be recalculated to be either larger or smaller than previously claimed.

Take the time to review the letter in full, ensuring that you understand its contents. Once you’ve carefully read the letter, you’ll know of any action that is required on your part. Ignoring a letter can cause punitive steps to be taken by the IRS, particularly if it is determined that you continue to owe an outstanding balance in taxes or penalties.

If the adjustment letter declares that you owe money to the IRS (and you do not plan to contest the matter), making due payment immediately will relieve you from further penalties. If lump sump payment is not possible, the IRS may provide for installment payments should you formally request as much via an agent, depending on your financial circumstances.

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Find: How Much Should You Take Out of Your Paycheck To Ensure You Don’t Owe Taxes Next Year?

Keeping any letter sent by the IRS is wise, and in your best interests. The IRS recommends that any correspondence pertaining to your filed taxes — or future tax implications — be kept in your records for at least three years.

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About the Author

David Nadelle is a freelance editor and writer based in Ottawa, Canada. After working in the energy industry for 18 years, he decided to change careers in 2016 and concentrate full-time on all aspects of writing. He recently completed a technical communication diploma and holds previous university degrees in journalism, sociology and criminology. David has covered a wide variety of financial and lifestyle topics for numerous publications and has experience copywriting for the retail industry.
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