Put it in a drawer and forget about it...then all your problems will go away. Just Kidding! Seriously, don't rip it up or put it aside.... but don't panic! Most letters from the IRS are triggered by minor issues or common errors -- and there are loads of them...and the IRS is really slow. For all you know, the IRS might even owe you a refund!
The single most common reason people receive letters from the IRS is human error. Every year, more than 1,000,000 letters are sent to people because they failed to sign their returns... or maybe they made a mathematical error... or my personal favorite: the IRS made the mistake. According to Jeff Schnepper in his book, How to Pay Zero Taxes, the IRS sent out apologies to 20,000 taxpayers for mistakes it made in handling their accounts.
The #2 cause for a letter from the IRS is mismatched interest and dividend reporting. Payers of interest and dividends are required to report those payments both to you and to the IRS on a Form 1099. If the amounts reported don't match the amounts on your return, you can bet you'll get a letter from the IRS... but sometimes it can take a while.
None of these letters or issues is cause for concern - most of them can be resolved with a simple, coherent explanation to the IRS and the issue goes away. Math errors and mismatched dividend or interest reporting rarely cause a full audit. Further, almost all of the letters received from the IRS are computer-generated so if an input error was made, it's now your problem. But in almost all cases, a well-drafted letter with supporting documentation will resolve the issue.
If you receive a letter and have questions, contact your local Liberty Tax office to get assistance.
Disclaimer: Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.