So You Have Received A Letter From The IRS Part One

By Mallory Megan

Ah, the Internal Revenue Service. We have all seen television shows and movies depicting a lean, mean tax auditor terrorizing a protagonist about their tax returns in person. But don´t fret too much if you receive a letter in the mail from your friends at the IRS. If you do your best to abide by the laws, and aren´t a millionaire with a secret offshore account, chances are that your letter from the IRS isn´t informing you that you are going to have to suffer through an audit in person.

Last year, the Internal Revenue Service examiners and auditors audited only one in five hundred individual taxpayers in the flesh. But IRS workers with less training and lower pay who work mostly with computer information completed 1.1 million 'correspondence audits,' (audits by mail), mailed out another 3.5 million 'CP-2000' letters letting taxpayers know that they left some type of income off of their returns, and sent out 3.2 million 'math error notices.'

In the last nine years, our friends at the IRS have tripled the number of audits by mail. Now, the Internal Revenue Service is expanding its usage of 'math error' notices too. While these may sound fairly tame, math notices have the capacity to sometimes be more troublesome than the correspondence audits.

That is because in a correspondence audit, the Internal Revenue Service hones in on an issue that stands out on a 1040. Examples might include unreimbursed employee business expenses or large charity deductions. Then they´ll mail a letter requesting that the taxpayer produce documents that prove these deductions within thirty days.

Even though problems with handling mail at the Internal Revenue Service mean that taxpayer responses may not reach the right person in time, at least in theory the taxpayer has a right to make her case. To Be Continued In Parts Two, Three And Four.

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