What to Do When the IRS Says Your Information Doesn’t Match: A Step-by-Step Guide
Introduction
Receiving a letter from the Internal Revenue Service (IRS) stating the agency has found discrepancies between your tax return and the information reported by your employer or other third-party sources can be a nerve-wracking experience. However, this is a common situation and doesn’t necessarily mean you’ve done something wrong. It’s important to take quick and proactive steps to resolve the issue with the IRS. In this guide, we’ll walk you through what to do when the IRS says your information doesn’t match.
Gather All Relevant Documents
The first step when dealing with an IRS notice of a mismatch between your information and their records is to gather all relevant documents and information. This includes a copy of your tax return and any documents showing income or other financial transactions that may not have been reported. You should also collect any notices you received from employers, banks, or other third-party sources regarding discrepancies or incorrect information.
Review the Notice Carefully
The next step is to review the IRS notice carefully. Examine the details of the notice to understand what information didn’t match and why the IRS is questioning the accuracy of your return. Review the notice to determine if there is any additional information the IRS is requesting.
Respond to the Notice Promptly
It’s crucial to take action promptly when dealing with an IRS notice of mismatched information. The longer you wait, the greater the possible penalties and interest fees. Respond to the notice promptly by following the instructions in the letter and providing the requested information in a timely and complete manner.
Consider Hiring a Tax Professional
If you’re unsure of how to address the notice or need assistance in responding to the IRS, consider hiring a tax professional. A qualified tax professional can review your situation, provide guidance on how to respond to the notice and can potentially represent you in negotiations with the IRS.
Request a Corrected 1099
If the IRS notice is related to an incorrect 1099 form related to self-employment or freelance work, consider requesting a corrected form from the employer or client. This can help rectify any inconsistencies found by the IRS.
Conclusion
Receiving an IRS notice of mismatched information is a common occurrence and doesn’t necessarily mean that you’ve done something wrong. By taking proactive steps, such as gathering all relevant documents, reviewing the notice carefully, and responding promptly, you can resolve any inconsistencies. Additionally, consider hiring a tax professional if you need assistance. By following this guide, you can effectively navigate the process when the IRS says your information doesn’t match, and avoid any negative financial consequences.
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