Today, the IRS emailed taxpayers about "tax notices." These notices are letters the IRS sends to taxpayers whenever they disagree about what is reported on your tax return. This IRS page provides excellent information about each type of notice. If you receive a notice, you can go to the link I mentioned in the last sentence and look it up.
The most typical notice is the CP2000. IRS employees don't sit down and type one of these out, rather, the IRS computers typically generate the CP2000 when you fail to report income on your tax return. These notices are, at times, incorrect.
Case in point; I helped a client the other day who received a notice because certain real estate transactions were not reported on his return. The IRS was expecting to see a line item on Schedule D of his return, but instead, his income from this transaction was reported on Schedule C. You see, he flips houses. His income overall was hundreds of thousands of dollars, and this one item, which totaled around $50,000, was wrapped up in the number he showed as business income on Schedule C.
Thankfully, the IRS posts this important information about notices, but something they don't speak much about is how to challenge their claims and win. You see, the revenue code has many protections built in that actually help the average taxpayer, but finding these helpful bits isn't so easy. And the IRS isn't likely to provide much guidance. This is where a good tax professional excels; we can save you plenty of money in the long run by helping you navigate the code, plan for tax changes, and respond to the IRS on your behalf.
Ric Honsa, CPA
www.honsacpa.com
