Correspondence From The IRS ? Yikes!

It's a moment every person dreads. You pick up the mail and there is an envelope from the IRS. It's not a refund check. What do you do?

Don't Panic

Each year, the IRS sends out millions of "correspondence audits" to taxpayers to request payment of taxes, notify them of a change to their account or request additional information. These audits normally cover a very specific issue, often notifying you of additional small amounts of income for which you owe tax. Each letter and notice provides specific instructions explaining what you should do if action is necessary to satisfy the inquiry.

Most correspondence can be handled without calling or visiting the IRS. You simply follow the instructions in the letter and the matter is put to rest. Alternatively, you can contact the IRS to contest the matter. Simply call the telephone number indicated on the letter or write an explanation as to why you disagree. Make sure to include copies of any supporting documentation you want considered by the IRS. Typically, it will take the IRS between one and two months to respond. During the first quarter of the year, it can take two to three months.

Sometimes, the IRS sends a second letter or notice requesting additional information or providing additional information to you. Be sure to keep copies of any correspondence with your records. The IRS has been known to lose track of actions involving a taxpayer's account.

Worse Case Scenario

Everybody has a few really bad days in his or her life. You know, the car breaks down, you spill coffee on your shirt while driving to work?you get notice of a full blown audit from the IRS. The first step you take should not be drinking to excess or driving for the border. You have rights when the IRS comes calling and one of them is particularly important.

Representation

You have the right to be represented by an accountant or attorney at your audit. Under no conditions should you even consider going to an audit by yourself. Doing so would be like throwing red meat to a lion. Instead, spend the money to get representation and let them handle the audit. In most cases, you won't even have to go to the audit.

Nightmarish tax audits are generally a thing of the past. A letter from the IRS should not cause you to faint. Usually, the news isn't that bad. If it is, hire representation and let them handle it.

Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.

In The News:

Jaitley gives 2-month extension to CBDT task force on direct tax code; panel to now submit report by July 31  Business TodayThe new direct tax code is set to replace the existing Income Tax Act; the aim is to reform the complex income tax laws into simpler tax codes with reduced rates, ...
Focus on direct tax reforms as panel set to submit report  Moneycontrol.comThe next thing that the people of India, who gave Narendra Modi his second full majority term, would be looking towards is reduced tax rates in the full budget.
Botched your tax withholding in 2018? It's about to get more complicated  CNBCFine-tuning your tax withholding is about to get a little more complicated. The Internal Revenue *Service* is expected to release a draft of its new Form W-4, the ...
CBDT wants shell cos ‘revived’ to collect pending taxes  BusinessLineIncome-tax authorities do not want to let go the revenue dues owed by shell companies that have been deregistered by the Ministry of Corporate Affairs (MCA).
Going reasonable: Finance Ministry revises tax collection target for FY20  Business StandardA day after election results are out, the Ministry of Finance has moderated the tax collection target for smaller cities, while increasing it for bigger centres like ...
The property tax reform package is heading to Gov. Greg Abbott's desk  The Texas TribuneThe bill aims to slow rising property tax revenues and make it easier for Texans to understand how their tax bills are determined. The House and Senate both ...
NY state passes bill allowing Congress to request Trump's tax returns  CNNDemocrats in New York state passed a pair of bills Wednesday that would allow Congress to get hold of President Donald Trump's state tax returns amid an ...
Trump tax returns legal battle: IRS lawyers agree with Democrats  Vox.comAccording to Josh Dawsey and Jeff Stein of the Washington Post, an internal IRS legal memo agrees with most outside observers that the Treasury Department ...
Havenly as ever Switzerland will remain a low-tax centre for big firms  The EconomistSWITZERLAND IS KNOWN for its delicious chocolate, its luxury watches—and its lightly taxed multinationals. Some 24000 international companies are ...
Corporate America paying its lowest share of taxes since Eisenhower  CBS NewsFederal income tax revenue from U.S. corporations hasn't been this low since 1960, IRS data show.
Task force on direct tax laws gets two more months to submit report  Business StandardThe deadline for the direct tax code task force to submit its report has been extended by two months to July 31, according to a government official. This decision ...
India notifies pact with US to check tax evasion by MNCs  Economic TimesThis information will enable an enhanced level of assessment of tax risk .
Where does California’s cannabis tax money go? You might be surprised.  The Mercury NewsDrug abuse prevention, public safety, protecting the environment, economic development — these were some of the visionary promises that legalized cannabis ...
Taxes in the Omaha area | Communities  Omaha World-HeraldState sales tax. Nebraska's sales tax rate is 5.5 percent. Iowa's is 6 percent. Local sales taxes may result in a higher percentage. Local sales tax. The local sales ...
Mayor Pete’s 49.9999% Tax Bracket  The New York TimesThis article is part of David Leonhardt's newsletter. You can sign up here to receive it each weekday. “Being left of Obama doesn't make you extremely ...
Albany Closes a Loophole for Trump Pardons. Next Up: His Taxes.  The New York TimesThe Legislature is poised to pass a bill that would allow three congressional committees to seek the release of President Trump's state tax returns.
View: Modi has failed to end India's tax terror  Economic TimesOverseas investors would like PM Modi to fulfill his 2014 pledge to make the tax system less capricious.
Angel Tax: Elections 2019: Industry roots for Angel Tax abolition, AI-enabled solutions  Economic TimesThe startup industry is hopeful that the new government will create a thriving ecosystem to make them flourish. Buoyed by earlier positive initiatives such as the ...
Legislature looks to save cash not cut taxes  Sunbury Daily ItemHARRISBURG — Though the state heads into the final month of its fiscal year in strong financial shape, there's been little talk at the Capitol about using this ...
Low-Income College Students Are Being Taxed Like Trust-Fund Babies  The New York TimesWASHINGTON — A little-noticed provision in President Trump's sprawling new tax law is treating middle- and low-income college students as if they are ...
Mega Millions jackpot soars to $418 million  CNBCThe Mega Millions jackpot has spilled over $400 million. It would be the ninth largest winning since the game began in 2002.
Trump+Taxes+Deutsche Bank+Mnuchin+Barr = Cover-Up  BloombergFor a White House that's as dedicated to “transparency” as this one, there sure are a lot of things being kept under wraps.
How Loopholes Help Trump and Other Real Estate Moguls Avoid Taxes  The New York TimesDonald Trump reported more than $1 billion in real estate losses on his tax returns from 1985 to 1994, The New York Times revealed this week. Those losses ...
TurboTax Uses A “Military Discount” to Trick Troops Into Paying to File Their Taxes  ProPublicaIntuit, the maker of TurboTax, created and promoted a “military discount” that charges *service* members who are eligible to file for free.
Profitable Giants Like Amazon Pay $0 in Corporate Taxes. Some Voters Are Sick of It.  The Indian ExpressIn Ohio, where companies like FirstEnergy and Goodyear pay no federal corporate taxes, Democrats haven't figured out how to leverage anxiety over income ...
Soda stream How to tax sugary drinks  The EconomistSUGAR TAXES are on a high. Around 40 countries and seven American cities have started to tax sugary drinks, mostly in the past few years. Supporters say ...
Vic premier defends taxes ahead of budget  NEWS.com.auTaxes are increasing in Victoria, but Premier Daniel Andrews says it's so his re-elected government can do more than promised and not fill a $5.2 billion revenue ...
Trump Accidentally Raised Taxes on the Children of Dead Veterans  New York MagazineAn ill-considered provision in Donald Trump's signature law hiked taxes on the survivor's benefits of Gold Star families, and low-income students' college ...
Are any of the Coalition's claims of new Labor taxes actually true?  The GuardianGuardian Australia asks two experts if eight ALP election policies can really be considered a 'new tax'
Viewpoint | The quick and simple tax filing guide for NRIs - FY19  MoneycontrolLovaii Navlakhi. Tax filing season is here and everyone is getting ready with their documents and financial details for the same. However, there is one question ...
Congress fails to reach pre-Memorial Day tax fix for Gold Star families  CNNIt's a tale as old as Washington: Senate passes bill. House passes different version of bill, wrapped into a larger, unrelated bill. One frustrated senator stops it ...
Soda Taxes Are a 'No-Brainer' for Public Health, Says the Author of a New Study on Them  TIMEA new JAMA study suggests taxing sugary drinks really can make people buy fewer of them, potentially translating to better public health. Taxes on soda and ...
Special Public Prosecutors Vacancy (Income Tax, Chennai)  Live LawIncome Tax Office, Chennai invites applications from advocates of substantial standing and repute and with good academic credentials for the empanelment of ...
Beachwood, Warrensville Heights schools sparring over Chagrin Highlands tax funds  Crain's Cleveland BusinessThe Beachwood City School District is appealing a common pleas court decision that it believes is costing the school district at least $5 million in tax revenue ...
The secret of why Donald Trump won't release his taxes  CNNOn Monday night, as expected, Treasury Secretary Steve Mnuchin informed House Ways and Means Committee Chairman Richard Neal, D-Massachusetts, that ...
Income tax e-filers drop by over 6.6 lakh in FY19: Official data  Economic TimesIncome tax e-filings have dropped in FY2019 contrary to believes that the tax base will increase post DeMo.
IRS could be forced to release Trump’s taxes in the heat of 2020  POLITICOThe administration is betting that it can drag out the coming case beyond next year's elections. That could prove a bad strategy.
5 Takeaways From 10 Years of Trump Tax Figures  The New York TimesThe Times obtained details from a decade of the president's tax returns, revealing $1.17 billion in business losses. Here's what else the numbers show.
Saudi Arabia Widens Excise Tax to Sweetened Drinks, E-Cigarettes  BloombergSaudi Arabia will expand an excise tax charged on tobacco and soda to include electronic cigarettes and all drinks with added sugar as part of its efforts to boost ...
President Trump proposes import tax on gaming consoles due to China trade war  Windows CentralCurrently, there's a trade war going on between China and the United States. Both countries keep on raising tariffs on imported goods, which means that the cost ...
Budget corporate tax cuts depend on LS outcome: Sources  Economic TimesThe government had assured industry of fulfilling its earlier promise of lowering the corporate tax rate in the full budget in July if it is voted back to power.
The Fray: GOP lawmakers propose eliminating income tax for volunteer firefighters, EMTs  Times Herald-RecordAt least four bills already were pending in Albany to increase by varying amounts the $200 credit that volunteer firefighters and ambulance workers currently can ...
How Vanguard Patented a Way to Avoid Taxes on Mutual Funds  BloombergControversial heartbeat trades help the funds avoid taxable gains.
Are you getting a tax cut? Some Minnesotans will. What about corporate tax rates?  St. Paul Pioneer PressAfter failing to get a deal last year, lawmakers approved a sweeping plan to update the state's tax code. It is needed after the federal Tax Cuts and Jobs Act of ...
Fuel Tax Rejig, Infra Required to Spur Air Traffic Growth  News18New Delhi/Mumbai: The downtrend in air passenger traffic might continue unless the new government takes steps to reduce air fares via rationalisation of jet fuel ...
Mnuchin refuses to turn over Trump taxes to House Democrats  CNNTreasury Secretary Steven Mnuchin on Monday denied a request from House Democrats for access to six years of President Donald Trump's personal tax ...
Income tax implications of PF withdrawal  LivemintThere should not be any gap in contribution to PF to avail of the continuous *service* clause.In the event of PF withdrawal before five years of continuous *service*, ...
Tax optimiser: Salaried Shanker can save more tax if employer contributes to his NPS  Economic TimesNot only should you ask your employer for the NPS benefit, but you should also invest in the scheme on your own. You can reduce your tax outgo significantly.
What is tax liability if I surrender my insurance policy before maturity?  Economic TimesIf you surrender the policy and opt out of the annuity scheme, the entire sum received by you from the insurance company will be treated as income.
Trump’s Tariffs Are a New Tax on Americans  The New York TimesPresident Trump's new tariffs on Chinese imports, which took effect at 12:01 a.m. on Friday, are taxes that will be paid by Americans. That is a simple fact, and it ...
Heres how the new Form 16 will change income tax return filing this year  Business StandardForm 16 is issued annually, by an employer to an employee as a proof of salary paid and taxes deducted on it. It has two parts i.e., Part A and Part B as ...
First 100 days of Modi 2.0 could see tax cut, GST rejig, bank reform  Economic TimesNEW DELHI: With the major event risk of election out of the way, analysts on Dalal Street have started speculating on what measures the government may unveil ...
Manpasand Beverages MD, CFO arrested in Rs 40 crore GST tax invasion and invoice fraud case  Business TodayThe Goods and Services Tax (GST) department officers have arrested the top executives of Vadodara-based Manpasand Beverages for creating fake company ...
Slowing direct tax collections may push govt to reset its budget math for FY20  LivemintNEW DELHI: Slowing tax collections may prompt India to cut its FY20 direct taxes target from the ₹13.8 trillion estimated in the interim budget, necessitating a ...
Netflix tax: Chicago successfully taxes streaming services  CBS NewsFour years ago, Chicago imposed a 9% tax on streaming entertainment services, leading to a flurry of lawsuits. Now, the city has collected $2 million in sales tax ...
In Wake Of Federal Tax Reform, Blue States Scramble To Hide High Taxes  The FederalistDemocrats insist richer people need to pay more taxes. When that becomes slightly more true because of a Republican initiative, they hide income.
Charity Sustrans calls for city workplace parking tax  BBC NewsA workplace parking tax on large employers should be considered in Welsh cities, a charity has told BBC Wales. Sustrans Cymru said city councils could tax ...
Why the Rich Don’t Get Audited  The New York TimesThe I.R.S. doesn't have the resources it needs to chase offshore accounts and tax cheats.
Decoding income tax exemptions  LivemintEET stands for exempt-exempt-taxable where an investor can receive two exemptions on investments.The last exempt implies that lump sum amount received at ...
Tax you pay on equity investments  LivemintFor unlisted equity shares and units of debt-oriented mutual fund, the holding period should be 24 months and 36 months or more.Long-term capital gains ...
Israeli Court Rules Bitcoin Is Not a Currency in Court Case Over Taxes on BTC Gains  CointelegraphThe ruling is a setback for crypto entrepreneur Noam Copel, who will now have to pay tax on $830000 in profits he made by selling bitcoin.
Death, taxes and flying a gigantic American flag: Camping World CEO is certain he’s right in fight with city hall  MarketWatchMarcus Lemonis, chairman and CEO of Camping World, says despite lawsuit, he won't take down the 3200-square-foot American flag that violates an ordinance ...
Looking to save tax? Here are 7 ways to take charge of your investments  The News MinuteWe are in a new financial year and it's the time to file taxes. Along with it, it is now the perfect time to plan your finances and tax-saving options. So, if you are ...
Hotels, realtors move Delhi HC over Input Tax Credit issue  Economic TimesA writ petition was filed in the Delhi High Court on Monday, challenging a change in the GST framework this year, whereby input tax credits were denied.
Samsung's Founding Family Faces a $7 Billion Estate Tax  BloombergThe lives of the rich and famous are news fodder everywhere. But in South Korea it's an expected death that has the country enthralled. The country's wealthiest ...
Directorate General of GST Intelligence issues notices to auto ancillaries over tax evasion  ETAuto.comMumbai:The Directorate General of GST Intelligence (DGGSTI), intelligence arm of the indirect tax department, has issued notices to multiple ancillary ...
How is long-term capital gains tax on sale of property calculated  Economic TimesThe CII of 2019-20 has yet not been announced. To arrive at the capital gain, you will have to reduce the indexed cost of acquisition from the selling price.
Income Tax Alert! CBDT modifies Form 15H. Know the changes here  Times NowNew Delhi: The Central Board of Direct Taxes (CBDT)recently revised the rules applicable in the filing of Form 15 H. The new rule will take into account the ...
India on road to ‘car registration portability’  BusinessLineOwners of cars or other vehicles relocating from one State to another will be spared the tedium of re-registering their vehicles and changing the vehicle number ...
Tax cuts, robust banking sector can revive private investment  Economic TimesNEW DELHI: Government capital expenditure has been the highlight of India's investment story so far, with private funding lagging, but independent economists ...
I-T dept set to bring changes in tax audit report for charitable trusts  Business StandardThe income tax department is set to bring changes in the tax audit report for charitable trusts to check misuse of funds, including foreign donations. This will be ...
Election results 2019: Many hope NDA-II to roll back LTCG tax on equity  LivemintWith clear trend suggesting the NDA-II forming the government, many hope that the government will review the unpopular long term capital gains tax on equity ...
US Income Tax Payers Can Now Get Refunds in Bitcoin  CoinDeskIncome tax payers in the U.S. now have the option to receive their federal and state refunds in bitcoin. Blockchain payments processor Bitpay announced the ...
They Got Rich Off Uber and Lyft. Then They Moved to Low-Tax States.  The New York TimesMeet the semiretired millennials who left California for low-tax, low-stress places like Texas, as their former start-ups stampede toward the stock market.
AAR allows input tax credit by debt settlement under GST regime  Business StandardCompanies can claim input tax credit (ITC) under the goods and services tax (GST) regime even if the liability to pay for inputs between them, including tax, ...
No, corporate tax avoidance is not legal  Financial TimesNicholas Shaxson is the author of Treasure Islands, a book about tax havens, and The Finance Curse, a book about countries with oversized financial sectors.
Reduce tax on ATF or include it under GST: Ajay Singh, SpiceJet  Economic TimesIf we can address some of the structural issues bugging aviation sector, there are many years of good growth ahead of us, said Ajay Singh, Co-Founder, ...
Dividends from equities are tax-free for investors  Economic TimesDilip Lakhani Senior Chartered Accountant, answers queries from our readers on income tax and other levies.
Want to verify PAN from income tax website? Follow step-wise process  Times NowIf you wish to access your PAN card details online or want to verify your PAN card, follow the given below process.
A Tax That Could Fix Big Tech  The New York TimesPutting a levy on targeted ad revenue would give Facebook and Google a real incentive to change their dangerous business models.
Tumakuru City Corporation officials visit citizens’ homes to collect taxes  Times of IndiaBENGALURU: At a time when city corporations across the state are struggling to step up tax collections, a young IAS officer, T Bhoobalan, is changing the rules ...
Before you file your tax return, note the key changes in Form 16  Business StandardForm 16 is the annual salary TDS certificate issued by an employer to an employee. The Central Board of Direct Taxes (CBDT) has notified amendments in Form ...
Tax optimiser: How salaried Karthik can save Rs 1 lakh tax via perks, NPS  Economic TimesNot only should you ask your employer for the NPS benefit, but you should also invest in the scheme on your own for up to Rs 50000. You can reduce your tax ...
Steven Mnuchin Refuses to Comply With Subpoena for Trump’s Tax Returns  The New York TimesWASHINGTON — Treasury Secretary Steven Mnuchin on Friday refused to comply with a congressional subpoena to hand over President Trump's tax returns, ...
Clarity on angel tax, effective implementation of Press Note 2 among many things startups want from new government  Moneycontrol.comClarity on angel tax, data privacy and a sharp e-commerce policy is what the startup ecosystem is looking forward to from the new government as the Narendra ...
Arvind Panagariya on corporate tax, lower tariffs & fewer ministries  Economic TimesFor 70 years, the automobile industry has been protected with 100 plus kind of tariffs. Why should Indian consumers have to pay one and a half times the price ...
We don’t know what Trump’s tax returns are hiding. But the hints are troubling.  The Washington PostWhen you look at the short span of President Trump's political career, one question jumps out: How much of his craziest, most paranoid and norm-violating ...
Switzerland Votes ‘Yes’ to Being Tax Home for Big Business  BloombergSwitzerland approved an overhaul of the corporate tax code, choosing to stay an attractive base for companies like Procter & Gamble, Vitol SA and Caterpillar ...
GST filing to get simpler! New single tax returns form to be rolled out in July  Business TodayThe new simplified returns filing format, approved by the GST Council last July, is finally ready to be rolled-out after being deferred twice.
7 economic reforms that await Modi Season 2  Observer Research FoundationWith Verdict 2019 giving a greater political force to Modi's next five years — it is hoped that some of them will make the grade.
Govt likely to reverse tax concessions for salaried class  DAWN.comISLAMABAD: The government looks set to reverse tax concessions extended by the PML-N government to benefit high-earning salaried and non-salaried ...
Tax filing falls 1% in FY19,indicating overall slowdown:Report  Economic TimesThe number of people filing income tax returns has declined by a full 1 percent in fiscal 2019, despite the increased government focus to broaden the base, ...
Income Tax officers to fast track disposal of appeal cases  LivemintThe income-tax department has said it will undertake expeditious disposal of appeal cases, and look into taxpayer concerns of adjustment of past tax demands ...
Documents required for filing ITR  Economic TimesThe government has notified the income tax return (ITR) forms for FY 2018-19. This means that you can now start collecting the documents need to file your ITR ...
People need certainty on tax: Birmingham  SBSTrade Minister Simon Birmingham has kept the pressure on likely new Labor leader Anthony Albanese to back the government's income tax cuts.
Expect government to bring down corporate tax: Adi Godrej  Economic TimesThe government had promised that corporate tax would be brought down to 25%. They have done it for smaller companies but they have not done it for larger ...
Tax queries: Sections 54, 54F deductions available only for LTCG  Economic TimesDilip Lakhani Senior Chartered Accountant, answers queries from our readers on income tax and other levies.
With Kensington legion in serious financial straits, councillor calls for tax relief  Calgary HeraldThe Kensington legion branch is nearly $30000 in arrears on property taxes and facing mounting financial penalties just two years after opening the doors of its ...
Carbon tax smackdown: Andrew Coyne asks what is this argument really about?  National Post“Be it resolved that a carbon tax is the policy Canada needs to fight climate change.” Terence Corcoran and Andrew Coyne go head-to-head on whether a ...
Congress tries to fix ‘kiddie tax’ problem hitting low- and middle-income families  San Francisco ChronicleA change to the “kiddie tax” last year has created some adult-size problems that Congress is trying to fix. The kiddie tax refers to the tax rate that minors and most ...

Small Business Tax Deductions for Year End 2004

As a small business owner, it's wise to familiarize yourself... Read More

Gambling Income and Expenses - Tax Requirements

Hit a big one? With more and more gambling establishments,... Read More

The Seven Deadly Tax Sins: Commonly Missed Deductions

It's that time again, the April 15 tax deadline is... Read More

What the Tax Software Companies Dont Want You to Know

Haven't done your taxes yet? No problem. Now there is... Read More

Small Business Tax Deduction - Write-Off Bad Debts

Practically every small business has receivables that it cannot obtain... Read More

E-commerce Taxation

The means and types of businesses have transformed with advent... Read More

Fraudulent Tax Shelters ? KMPG Goes Down Hard

In the largest criminal tax case ever filed, KMPG has... Read More

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Someone once remarked, "Next to being shot at and missed,... Read More

Back To School ? Educators Deduct School Expenses

As teachers and students head back to school following a... Read More

Deducting Points On Home Refinances

Deduction of Refinance PointsAny points that you pay in the... Read More

Are You An Innocent Victim of These Popular Myths?

Misconceptions, misinterpretations and just plain "untruths" are floating about income... Read More

How To Get An Extension To File Your Business Tax Returns

Yes, the tax season is upon with the first filing... Read More

Surprising Truths About Tax Preparers

Choosing the right tax preparer for your business is a... Read More

How To Set Up A Tax-Saving Bookkeeping System

One of the most important, but least understood or appreciated... Read More

SFR Substitute for Returns: IRS Action on Non-Filers

In the latest Star Wars episode, the evil empire executes... Read More

How Likely Are You To Be Audited?

Statistics for IndividualsUnfortunately, the IRS increased its rate of auditing... Read More

Understanding Basic Tax Terms

If your like many, you don't always understand what people... Read More

The Implications of Income Tax Charge on Estate Planning

OverviewIn the Pre-Budget Report of December 2003 the Chancellor Gordon... Read More

Tax Trap #4 -- The Quagmire of Depreciation

If you are a Small Business Owner or Self-Employed Person,... Read More

Business Tax Loophole: Leasing Assets To Your Corporation

While there are many equally valid reasons to incorporate, saving... Read More

Are You Overpaying Taxes If You Use Tax Preparation Software?

For many business owners the answer to this quandary is... Read More

Small Businesses: Company Car Vs. Personal Mileage Reimbursement In Hurricane Katrinas Wake

With gas prices at an all time high before Hurricane... Read More

Donating Cars To Charity - New Tax Rules

On June 3, 2005, the IRS released guidance on charitable... Read More

Marriage or Divorce ? Check Your Social Security Number

Newlyweds and the recently divorced should make sure that names... Read More

Tax Time Tune Up

Excerpted from the new book, "How to Do Space Age... Read More