The IRS is a powerful agency that oversees the collection of taxes and imposes penalties and conducts criminal investigations, among other things. It’s understandable why receiving a notification from the IRS would cause panic; however, there are multiple reasons why the IRS sends letters to taxpayers. Indeed, there really is no need to assume the worst as there are plenty of reasons why the IRS has reached out to you. Before you get ahead of yourself, here are the different reasons why the IRS has notified you.
You Have a Balance Due Soon
If you receive a CP14 notice, it could mean that you have a balance due on one of your tax accounts with the IRS. A balance due means that you owe money to the IRS. The CP14 will state your balance, the date the payment is due, and how to pay off your balance if you wish to do so.
You are Due a Refund
After a CP12 Notice tells you that the IRS has corrected a mistake or mistakes on your tax return, the amount of your refund will either be larger or smaller than you originally thought.
They Have Inquiries About Your Tax Return
The CP2501 is an error on your tax return. The government has a discrepancy regarding the accuracy of your tax return. The IRS has requested clarification. If you receive this notice, you have thirty days to contact the IRS to explain the mistake.
They Need More Information
Letter 12C is an IRS request for additional information. They send this notice when they need proof of income or a signature to process a return. The information they will require ranges from verification to income to your signature.
They Changed Your Return
Let 525 inform you that changes have been proposed following an IRS examination of your taxes, which happens if you were selected for a regular audit. You have 30 days to dispute the changes. In addition, the IRS may find that you owe additional taxes. A notice of deficiency or Letter 3219 notifies you of the changes in the amount due to the IRS. Upon receiving this notification, you have 90 days to protest their findings.
They Are Notifying of Delays in Processing
Delays are part of life. Think of the global pandemic that caused mission-critical functions like live phone support to be disrupted, or incorrect or incomplete tax returns.
Letter 707C is the notice you should receive if there’s a delay in processing your refund or return. You may also receive this letter if there’s money coming to you. If you don’t get a notice or a refund, or if you receive a notice that a return is overdue, don’t panic. The IRS won’t take care of that for you.
They Need to Verify Your Identity
The IRS may contact you to verify your identity if it suspects you of being a victim of identity theft. This prevents others from using your stolen identity in the future.
We hope this article proves to be useful when it comes to informing you of the many reasons why the IRS is notifying you. As you can see, there is a slew of different reasons why you are being notified. Be sure to keep this in mind the next time the IRS reaches out to you.
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