The first forty-eight hours after an IRS notice

The majority of notices are automated. A figure on a return did not match a figure reported to the agency by someone else, a payment was applied to the wrong period, or a form was expected and not received. These are matters of correspondence, not of jeopardy.

The single worst response is to put the letter aside. Nearly every notice carries a response window, and the options available to you narrow considerably once it passes.

Before doing anything else, establish the basic facts of what has arrived.

The instinct is to call at once and sort it out. Resist it. Compare the notice against the filed return and the supporting records first, because a proposed change is not the same as a determination and is sometimes simply wrong.

Anything you say on an unprepared call becomes part of the record. Verify the position, then respond, in writing, with documentation attached.

A simple mismatch you can evidence in a page or two may not need help. Bring in a CPA or enrolled agent when the amount is significant, when the notice concerns payroll taxes, when an examination rather than correspondence is proposed, or when the underlying position is genuinely arguable rather than a clerical error.

Representation means the correspondence and the conversations run through your representative rather than through you. That is worth having in place before a matter becomes contested, not after. One flooring contractor came to us facing a proposed bill of five hundred thousand dollars, which was ultimately eliminated.

A notice is usually a symptom. A missing form, an information return that never arrived, an estimate that was never adjusted, a payment applied to the wrong quarter. Resolving the letter without addressing the cause invites the same letter next year.