Question

what are the 3 steps in tax notice system

Answer 1

Solution:

The IRS sends notices and letters for the following reasons:

• There is a balance due.

• You are due a larger or smaller refund.

• There is a question about your tax return.

• There is need to verify your identity.

• Need of any additional information.

• Your return is changed.

• To notify for delays in processing your return.

Next 3 steps in Tax notice system are as follows:

Step 1: Read

Each notice or letter contains a lot of valuable information, so it is very important to read it carefully. If Tax department has changed your tax return, compare the information provided in the notice or letter with the information in the original return.

Step 2: Respond

If the notice or letter requires a response/reply by a specific date, there are two main reasons for which you’ll want to comply:

• to minimize any additional interest and penalty charges.

• to preserve your appeal rights in case of disagreement.

Step 3: Pay

Pay as maximum you can, even if you can’t pay the full amount you owe. You can pay online or apply for an Online Payment Agreement or Offer in Compromise.

It is always important to keep a copy of all notices or letters with the tax records. You may need the documents (notices & letters) at a later date.

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