In my line of work I frequently have clients who completely overreact when they get a letter from the IRS. Therefore, I would like to offer the following suggestions regarding what you should do if you find yourself in this situation.
- Remain calm.
- Remain calm.
- Remain calm.
- Open the envelope. 1
- Remain calm.
- Remove the letter from the envelope.1
- Remain calm.
- Read the letter.1
- Remain calm.
- Ask yourself, "Do I know what this means?"1
- Remain calm.
- Remain calm.
- Remain calm.
- Ask yourself, "Do I need help with this?"1
- Remain calm.
- Then, and only then, if you've determined that you don't understand or need help, take the letter to a professional.
- Remain calm.
I bring this up because a staggering percentage of our clients skip directly to step 16 and omit the "remain" in step 17.
The truth of the matter is that a lot of correspondence from the IRS is just to inform you that they made a minor change to your return or ask that you clarify a minor point. If you feel more comfortable getting professional help, that's fine. However, you should at least make an effort to understand the situation before calling your accountant in a panic.
Update: Another common approach, throwing the letter in a drawer (unread) and forgetting about it, is also not recommended.
1(This seems obvious, but many of our clients miss this vital step.)
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