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The International Revenue Service(IRS) sends notices on a weekly basis, so you are not supposed to ignore them and respond to them on time. It is essential that you do not overlook them as it can only make things difficult for you. In Dallas, both small and large businesses are running.
Whether you are a small business owner or own a large enterprise, you are required to keep your records accurate if you want to avoid getting audited. The IRS might also send you a notice telling you that you owe taxes, or it is to inform you that an audit is going to be conducted for your business, etc.
There are millions of notices that the IRS sends on an annual basis. They might also try to settle any dispute related to taxes, which is why you are receiving the notice.
In order to come to a resolution for such matters, you need first to understand how you will be drafting a letter for the IRS. Get in touch with a CPA in North Dallas, Texas, as they can help you with such things.
Table of Contents
What is the reason for sending letters to taxpayers?
The IRS sends letters for several reasons, many of which are usually concerned with a tax return that took place in the past. Let us look at some examples:
- The International Revenue Service might have made some changes to your tax return.
- The tax return might have some mistakes or errors in it.
- If you owe back taxes, you can receive a letter from the IRS too.
- If there is an audit that is going to be conducted for your business, then again, you are likely to receive a letter.
- You might receive a tax refund by mail.
- Getting bills of taxes that were not paid or installment payments.
There are rare cases where taxpayers might receive a letter regarding being alleged for criminal tax fraud or something that has to do with tax evasion.
Thus, if you see a letter for any of the above reasons or some other reason, you are not supposed to ignore it and look into it as soon as you can.
There is a deadline under which you are required to respond to the notice or letter; thus, make sure you do not cross the deadline. It will only complicate things further.
Is it essential that you respond to the IRS Letter?
Some IRS letters do not really require a response from your end. Let us say you are just receiving a letter to get informed about the correction on your tax return or if you are being given the record of your payment made in the past; then in such cases, you can file the letter and attach all your financial details, and that would be it.
In two instances you are required to respond, let us look at them briefly:
You disagree with what the letter is enclosing:
Let us say you receive a letter that does not require your response, but if you find the content in the letter not relevant or you disagree with it, then you should consider responding to it. To give you an example, let us say you receive a refund that is smaller than what you expected; in such a case, you can consider responding to it.
Letter that says you need to reply:
There are letters that do require your response to it; such letters must not be ignored. You should respond to them promptly. Let us say that we sent you a letter informing you that your tax return is not complete and you need to attach some details to it; you must respond to such letters on time.
Avoid getting audited today!
In order to reduce the chances of getting audited, you need to ensure everything in your business meets the legal criteria. A professional in the field can help you with that.
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