Thursday, September 24, 2015
DO NOTHING TILL YOU HEAR FROM ME
Good advice from Duke Ellington – especially for my 1040 clients when it comes to notices from the IRS or a state tax authority.
If you receive a balance due notice from the IRS or a state tax agency DO NOT AUTOMATICALLY PAY THE AMOUNT REQUESTED!
In my 40+ years of preparing tax returns I have found that more often than not (actually in my experience it is more like 75% of the time) a balance due notice from “Sam” or your state is wrong. And, again in my experience, notices from a state tax agency (at least when it comes to NJ and NY) are wrong more than ones from the IRS.
If you receive a balance due notice from any tax agency immediately mail, email, or give it to the tax professional who prepared the return, or your current tax professional if you have changed preparers since filing the return in question. If you “self-prepared” the return, perhaps relying on a “box”, seek out a tax professional for advice. You can start your search at FIND A TAX PROFESIONAL.
And DO NOTHING TILL YOU HEAR FROM YOUR TAX PRO.
Even if the notice is correct, if it includes a penalty assessment for late payment, late filing, or underpayment of estimated taxes your tax professional may be able to get the penalty completely or partially abated using the federal First Time Abatement program, reasonable cause, or annualizing your income for estimated tax purposes.
And – very, very, very important – when sending the notice to your tax professional DO NOT SAY TO HIM OR HER, “HEY, YOU MADE A MISTAKE ON MY RETURN.”!