IRS Computer Notices: The Facts

You might be scared of your mailbox if you have IRS issues. Is this the day I will get an IRS notice? Has an IRS computer audit found an error in my tax return? Do I need to pay the IRS more taxes?

Information from the IRS's own records and from other sources are used by the IRS computer system to check tax returns and send notices. If an error was found on your tax return, you'll receive a notice about the discrepancy, whether you are asked to pay more taxes or are getting a refund (highly unlikely). The balance due includes interest and penalties.

There are more than 300 kinds of IRS computer notices, typically:

Claims you did not report all of your income: The IRS computer scans its files and compares information to determine if you've reported all your income.
Claims you made a math or clerical error: Clerical and math responses are checked when the IRS computer analyzes your return.
Claims you failed to file your return: The IRS computer can see if a return was filed as needed.

Write to the IRS immediately and demand a correction if you receive any of the 300 notices from the IRS and it's not correct. Don't hesitate to challenge the IRS if you disagree with the calculations. It is also important to make copies of all correspondence with the IRS and keep them with your records.

If you do need to pay the IRS more taxes and do not pay in a month of getting a notice, you will receive 3 more IRS notices known as the "500 series". The CP-501, CP-503, and CP-504 notices are bills. You're reminded that you owe a tax debt through a CP-501. CP-503 tells you that immediate action is required from you. CP-504 is an urgent reminder to respond now and if you don't, that a levy will be issued.

Darrin T. Mish is a Nationally recognized Attorney whose practice focuses on representing clients across the United States with IRS Problems. He is AV rated by Martindale-Hubbel and is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. He has been honored by a listing in Martindale-Hubbel's Bar Register of Preeminent Lawyers. If you have an IRS Problem and need IRS help then contact him immediately. He can be reached at his website at http://www.getIRShelp.com or tollfree at (888) 438-6474.