Why you may have received a notice from the IRS

With the April deadline behind us and 2023 tax returns being processed by the IRS, you may receive a tax notice. Receiving a letter from the IRS can be intimidating and raise numerous questions. At Abacus, we are here to assist you.

Here are a few main reasons why you might receive a letter from the IRS:

1. Discrepancy in Amount Due

The amount due on your tax return may differ because your estimated tax payments do not match IRS records. Here’s what you need to do:

  • Review Your Payment Records: If you made all payments online, you should have receipts. Verify that the amounts and payment years are correct. A common error is including prior year tax payments as estimated payments for the current year.
  • Check Payment Status: If you made payments via check, ensure the check was cashed. The IRS is behind on processing mail, so your check might not have been processed yet. Do NOT cancel the check; wait for the IRS to process it. To avoid such issues, make estimated and balance-due payments online whenever possible.
  • Match Records: If your records match the IRS records, no further action is required other than making the necessary payment.
  • Respond to the IRS: If your records are correct but do not match the IRS notice, respond to the IRS by their deadline with:
    – A copy of the notice
    – Proof of payment, including amount, date paid, and the year it was intended for

2. Additional Income Added

You may receive a notice if additional income, such as a missed W-2, was added to your return. Some taxpayers might omit income if they believe withholdings cover the tax owed, but this can lead to underpayment. Adding income can increase your tax bracket, resulting in additional tax owed, penalties, and interest. If you agree the income was earned, the only action required is arranging to pay the balance due.

3. Balance Due Notice

If you owed money when you filed your return, the IRS will send a CP14 Notice. Your options are:

  • Pay the Balance: Pay the amount stated on the notice.
  • Set Up a Payment Plan: If you can’t afford to pay the balance, set up a payment plan on the IRS website. For multi-year payment plans, contact us to discuss how Abacus can assist you.

Important Tips

Do NOT Ignore the Notice: Ignoring the notice can have negative impacts on your tax situation, especially if there is
a response deadline.

Send a Copy to Your Accountant: Your accountant may need this information to reconcile your tax records.

If you need assistance responding to the IRS or setting up a payment plan, Abacus CPAs is here to help. Contact our team today for more information at 417.380.5000 or email us at transportation@abacus.cpa.