What Is A Tax Notice?

A Tax Notice is a letter (notice) issued by the IRS telling you that they have changed your tax return. The IRS assumes that their notice is correct and the burden is on you to prove otherwise.

Mathematical Correction Notice — This notice is usually mailed shortly after you file your tax return. The issues addressed include mismatches between names and social security numbers, earned income credit qualifications, filing status, estimated tax and withholding tax errors, assessments of estimated tax and late filing penalties and interest, and the IRS making an assumption that mathematical errors exist in the return. These errors, if correct, are usually data entry errors or data that was not verified back to the original source documents. In the event of this type of notice, the IRS sends you a bill for the balance due. The IRS assumes that their calculation is correct and will commence collection action if not paid promptly. Many of these bills are not correct and must be handled immediately and in the proper manner. This is the most common type of notice and often the most difficult to fix. This notice may turn into an audit.

Income Document Matching Notice — This notice usually occurs from 9 to 18 months after your tax return is filed. This notice involves matching all 1099 forms, W-2 forms, and K-1 forms to your tax return. If the IRS believes that you did not report all of your income based on their computations, they will send you a bill itemizing why you need to pay more. They will not send you a notice if they believe that you have overpaid your tax. The IRS believes that their information is correct and you must prove to the IRS that their records are not correct in order to reverse the adjustment. This is the second most common type of notice and must be handled promptly and properly. This notice may turn into an audit.

TaxResources will handle any income tax related notice or letter from the IRS or state for our members. We will review the notice and the related tax return, discuss the issue with you including what documentation you may need to provide, and then handle the notice as needed from start to finish.

Protect Yourself. You must purchase your membership prior to receiving the notice. The day your audit notice is issued is one day too late!