Every year, the IRS sends thousands of different pieces of correspondence to taxpayers and businesses. A certified letter from the IRS may cause you some anxiety when you open your mailbox, but your first instinct shouldn’t be fear.
IRS certified letters are sent for many different reasons, and often for more mundane issues. These are typically a result of a specific issue on your federal tax return or tax account.
Certified letters might tell you about changes to your account or ask you for more information. Given the different types of certified letters the IRS will send, let’s take a look at some of the important elements to consider.
The IRS sends a certified letter to start the clock ticking on important deadlines
The central reason for the IRS sending certified letters is to serve as proof or “start of the clock” on a time-sensitive issue. These certified letters may be sent in conjunction with other notices that outline the issue in additional detail or request more information or payment from you.
Whatever the case, the certified letter serves as the legal proof that you were notified about this issue. Not only are there internal deadlines that the IRS may be attempting to enforce, but the IRS is also legally obligated to notify individuals within certain time frames thanks to federal tax law. The certified letter serves as their evidentiary proof in court if the issue becomes disputed legally.
Reasons the IRS sends a certified letter
As noted previously, there are a variety of reasons for the IRS to send a certified letter. The most common include:
Outstanding or delinquent balances
These are sent to notify individuals or businesses of unpaid or late balances that must be resolved within a given timeframe (usually before penalties or further escalatory actions commence). Consider tax resolution services to resolve delinquent tax debt if you feel lost.
Audit notifications
These notices serve as a warning of the commencement of an audit, in compliance with federal law requiring timely notification.
Notices of levies
The IRS is legally required to give you notice 30 days before serving an actual levy on a bank, your clients, or your wages.
Tax return questions
These certified letters are often centered on return or refund discrepancies (such as the initial tax refund being too low or too high).
Notice of determination
These certified letters outline a final internal decision from the IRS on an outstanding issue, such as determination of self-employment or relief from specific liabilities.
Are the certified letters automated?
Yes and no. You may receive certified letters from individual IRS agents who may be handling your particular case or working on your account. This could include audits that are beginning or are currently ongoing, as well as other status updates, liability reviews, or appeals.
The letters are generated as a result of the individual IRS agent meeting a deadline, making a determination, or notifying you of an upcoming stage that must be reported to you to meet federal statutory requirements.
Certified letters may also be part of automated account reviews, depending on the purpose which is outlined within the letter. This might be the case when fines or fees are assessed after an investigation is closed, or after a refund adjustment was made internally.
How many letters will the IRS send?
For certified letters that require further action or are notifying you of upcoming actions, you can expect to receive several notices, which are meant to serve as reminders and give you adequate time (often dictated by law) to respond to the final notice.
If the certified letter is notifying you of the conclusion of an investigation, for example, you shouldn’t expect to receive additional letters.
Where can you get more information on a certified IRS notice?
There are a few resources you can visit:
IRS.gov
This should be your first stop since the IRS website offers plenty of helpful resources (both articles and contact opportunities) for receiving the needed information to clarify the issue stated in the certified notice.
Tax advice and information websites
There are numerous reliable tax advice websites with information repositories on common issues that require IRS certified letters. These should be used for guidance and in conjunction with info from the IRS itself.
Your accountant
If you have an accountant, they can serve as your professional advisor and consult you on the issue within the certified notice, as well as potential steps to take to resolve the issue if needed.
What to do if you receive an automated letter?
If you receive an automated letter from the IRS, you should:
1. Open it right away
Since certified IRS letters deal with time-sensitive issues, it’s important to open them immediately to figure out what the issue is and what steps and deadlines may be involved.
2. Carefully review the dates on the letter
This is important to ensure you don’t miss a critical deadline, especially in multi-stage processes.
3. Evaluate the cause of the letter
This is a good step to turn to the resources for tax advice noted in the section above.
4. Consult a tax professional
Turn to a certified tax professional to ensure you know what your next steps are.
FAQ
Questions about certified IRS letters? We have the answers.
No. Certified letters may be sent to notify you of an audit, but they are also sent for various other reasons.
No. Failure to respond to certified IRS letters, which are often a final step taken in various processes, can carry serious consequences for an individual.
You should reach out and contact an IRS representative to clarify the issue, or consult with your accountant to identify next steps forward.
For notices of determination, you will likely not need to take any further steps. However, for unpaid balances, audit notifications, or other process notifications, you should consult with a certified tax professional.
For issues that may involve criminal liability, you should consult a lawyer. You can also consult a certified tax professional for tax specific issues such as liens, back tax notifications, and disputed cases.
In most cases, spouses filing a joint tax return are both held responsible for any tax debts that come from a joint filing, even if you both didn’t receive one. You should reach out to the IRS or consult your accountant to clarify the situation and potential liabilities for you both.
