How To Handle IRS Tax Notifications

IRS tax letters

How To Handle IRS Tax Notifications

Holy Crap!  It’s An IRS Letter

Handling IRS Tax Notifications

John opened the front door of his modest three-bedroom home to perform the most mundane of tasks, retrieving the mail.  He wasn’t rich by any stretch of the imagination, but he did live comfortably.  Their home was well furnished and his garage held two shiny, albeit used, automobiles.  In every sense of the word, John was average.

Little did he know that this day would bring news that would change his view of life and fairness, forever.  It was a short walk to the small box balancing precariously on the worn-out post.  Opening it, he bent down to peer into the gloom.  There he saw the usual junk mail, a local newspaper, single half sheet advertisements and a strangely official looking white envelope.  He cautiously sifted through the various articles of mail as he shuffled back to his front door, purposely leaving the ominous white envelope for last.

Passing the garbage bins, he lifted the lid of the one closest and deposited the bulk of the mailbox contents into a more fitting receptacle.  All that remained was the white envelope, which he now eyed with a mix of curiosity and apprehension.   On its face, it bore the stark inscription, “Internal Revenue Service”, and then as if an afterthought were the words, “Official Business”.

Sitting at his kitchen table, John slowly opened the letter and began reading its contents.  After a moment, the contents sent his mind into a profound fog, as he looked up with a blank stare.  John’s wife entered and upon seeing his face said,

“What’s the matter with you?”

All he could do was stammer an unintelligible noise as he held the letter out for her.

All Too Familiar a Scenario?

Does this scenario sound familiar to you?  It might if you have ever had such a letter.  The federal tax code has become so complicated and incomprehensible that it is almost impossible to avoid making some financial mistake that will land you in the IRS’s cross hairs.  It is true.

A Brief History Lesson

Perhaps a brief history lesson about how the IRS came to be might be in order here.   There is a misconception that has been spread about that the payment of income taxes is a voluntary system.  This probably has arisen because of statements like these,

In 1953, Mr. Dwight E. Avis, head of the Alcohol and Tobacco Tax Division of the Bureau of Internal Revenue, made the following remarkable statement to a subcommittee of the Committee on Ways and Means in the House of Representatives:

“Let me point this out now:  Your income tax is 100 percent voluntary tax, and your liquor tax is 100 percent enforced tax.  Now, the situation is as different as day and night”

 (Internal Revenue Investigation, Hearings before a Subcommittee of the Committee on Ways and Means – Feb. 3 thru Mar. 13, 1953)

In 1971, the following quote was found in the IRS instruction booklet for Form 1040:

“Each year American taxpayers voluntarily file their tax returns and make a special effort to pay the taxes they owe.”


And further still is this statement by the Supreme Court of the United States:

“Our tax system is based upon voluntary assessment and payment, not upon distraint. “

(Flora vs United States, 362 U.S. 145) (The preceding information is offered courtesy of the Supreme Law Firm Website

(The preceding information is offered courtesy of the Supreme Law Firm Website

What’s The Truth Then?

“Aha!”   You exclaim, “You see? I don’t have to pay income taxes if I don’t want to, it’s voluntary!”  Yes, well perhaps in an alternate reality such grandiose sentiments might have merit, the problem is, we live in the United States of America.  Here the harsh truth is:

Don’t Pay Your Taxes and Go To Jail

The truth of the matter is this. The wording “Voluntary” refers to the manner of payment of taxes and not to the actual duty of tax compliance. Yes, you can voluntarily pay taxes in any manner you like. There is even a instance of a person paying their substantial tax burden with pennies. Yep, they backed the dump truck up and just emptied it in front of the IRS building, well maybe not so literal but they still paid that way.

So What’s A Guy To Do?

First and foremost, don’t panic.  It does not good to work yourself up into a lather and get your heart racing.  While a letter from the IRS is definitely cause for concern, it is not as bad as you may think.  Basically you have three choices at this point.

tax notifications
Try to handle it yourself

This entails calls to the IRS, being on hold for up to three or four hours and hoping the person on the other end is in a good mood.

tax notifications
Ignore the letter

Not the recommended course of action.  Inevitably, more letters will follow and they won’t be as pleasant.

tax notifications
Get Some Help

Now you’re thinking. Though talking with a qualified professional may seem daunting, it is actually the surest way to achieve the favorable outcome you are hoping for. Whether it be a licensed Certified Public Accountant, A qualified Tax Accountant, or some other similarly qualified individual, you will always be glad you took the time to seek some guidance.

But you may be thinking, “What? I got this. I don’t need any help!” Perhaps that is true. You may be the 10% of the population that has innate skills and abilities to comprehend the voluminous tax code, which by the way comprises almost 75,000 pages of baffling explanation and text. You heard me right, 74,806 pages of mind numbing tax code. Even the most avid student of tax law finds this a challenging read, so good luck with that.

What Can a Professional Do For Me?

There are so many things that can be done, if you know how to go about doing them.  When you contact a professional CPA, Attorney, or other financial advisor, they can act as an intermediary on your behalf.  They know how to speak the language of the IRS.  Often, they can handle the problem right on the phone and avoid future hassles.  Find an advisor who puts your needs first and who will take the time to find out your personal situation and represent you in as advantageous way as possible.  It may take a bit of research on your part to find just the right company, but it will be time well spent.  Here are just a few of the benefits a professional financial advisor can provide:

mileage deductionsA qualified professional can explain the IRS letter to you in language you can understand and they can layout all the options that are available to you, and believe me there are quite a few; many you would not have been able to come up with on your own.

mileage deductionsA qualified professional can contact the IRS on your behalf and negotiate with an IRS agent directly to resolve the problem.  They can negotiate lower payments and help clarify your situation to the IRS agent to facilitate a positive outcome for you.

mileage deductionsA qualified professional can provide sound advice to prevent further problems down the road.  They can help you develop a clear strategy that will be advantageous to you and your unique situation.

Advanced Tax Solutions Is Here To Help

So in conclusion, if you find yourself in the unfortunate situation of having to respond to an IRS Tax Notification, give Advanced Tax Solutions a call.  We offer a FREE 30 minute consultation.  During this consultation we can decipher the confusing terminology of your IRS letter and help you understand what your options are.  Getting in touch with us is easy, just call (801) 999-1340 or follow this link to send us a message and we will contact you.  Whether you contact us or choose some other financial professional, the message is the same.

When dealing with intimidating IRS communications, you need help.  A small investment now will avoid a much larger investment in the days to come, not to mention the peace of mind you will have knowing your IRS problems are behind you.  For more tax advice and information visit our website.

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