financial

Received An IRS Notice? What Should A Business Owner Do

Running a business is a challenge in itself, no matter what its size is. Beyond the operations, one thing that baffles the owners the most is taxes. Experts suggest that keeping your financial records in place, filing returns on time and paying taxes before deadlines will have you pretty much covered. At the same time, chances are that the IRS may still find something to implicate you.

You may be doing everything right but there is always a lurking fear of getting an audit notice from the IRS. It can give you sleepless nights, even if it isn’t for major troubles such as evasion or tax fraud. Even the thought is daunting, but what if you get one? Wouldn’t it be better to know exactly how to handle the situation? Here are some tips for helping you out.

Don’t freak out

Chances are that you will freak out when you see the audit notice for the first time. But the best advice is to take a deep breath and get some clear thinking going. Remember that you are not the only one who has got a notice. Every year, the IRS sends across millions of them to businesses and tax payers for reasons as simple as missing the deadlines or making mathematical errors on the returns. In fact, many of them are automated and do not even mean that anything is seriously wrong.

Read the notice

Once you are through with the initial shock, you should read the entire notice thoroughly. Check front and back and also read between the lines to understand what the notice is actually about. You need to understand why you have got one in the first place. Sometimes, the IRS just sends across a notification and you need not even do any action when you receive the notice. Mail is the primary form of communication that the IRS relies on and they will send across anything that you should know via a mail. So a notice is not always as ominous as it sounds!

Figure out what you need to do and take relevant action

Once you read the notice, you will probably understand what you really need to do and the obvious step would be to take the requisite action. If you agree with the notice, go ahead and comply with the instructions. On the other hand, you must respond to the notice if you don’t agree with it. The best way to do it is by seeking the services of seasoned tax attorneys offering comprehensive solutions for tax problems and IRS notices. They can help you draft a reply and send across the required information and documents which the IRS may consider for validating your reply.

Figure out the deadline and adhere to it

Even when you may be doing everything to avoid an audit, skipping the deadline will not help. Do check whether the notice specifies a deadline for the action to be completed. The standard for complying with the IRS notice is typically 30 days. However, the best advice is to handle them as soon as possible. For example, if the notice asks you to rectify your returns, you should do it sooner rather than later and resubmit before the stipulated date. If you are collaborating with a tax attorney, they will make sure that your case is looked after before the deadline.

Make sure that you don’t fall for a scam

Receiving an IRS notice may always ring warning bells but there are chances that it could be a scam as well. So it is better to keep your eyes open and steer clear of such scams. The IRS always sends notices and letters by mail. If you get a notice via any other means, someone may be taking you for a ride. Also, they will never seek any personal or financial information by mail or social media. Also, you must absolutely check where the notice is coming from because you may get one from the IRS or a state tax agency. While this will keep you safe from scams, you will also need to handle the notice differently depending on the agency you get it from.

An IRS audit notice does smell like trouble but clear thinking and proper handling can get you out of trouble without much work. Also, you should absolutely rely on the advice of an expert tax attorney when you get one. They can come up with a feasible solution and handle negotiations with the IRS on your behalf.