Responding to Love Letters from the IRS

April 9, 2020

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Video Transcription:

Love letters used to be a thing of the past, but they’re making a comeback. Hi, I’m Donna Bordeaux with Love letters from the IRS and state agencies are making a giant comeback. It’s very rare that you will not receive a letter from the IRS or your state taxing agency within a few years. It’s become a fact of life. And I know people dread opening that mailbox and seeing that letter from the IRS, the mysterious Greek written letter where you can’t even quite understand what they’re saying. All right, I want to calm you and tell you, you will be receiving one of these letters in your mailbox within the next couple of years if you haven’t already. It’s not something you have to be all that afraid of. Sometimes you may have forgotten something. Many notices are based on matching and that is that some outside financial authority has fed information to the IRS.

Each time you sell stocks or take distributions from retirement funds, all of that information is fed into the IRS and the big bad computer in the sky matches that information to your personal tax return that was filed. If it finds any discrepancies or if it just can’t quite understand what happened, you may get what’s called a CP2000 notice. These are very common. They’re very scary because in a lot of cases they will calculate tremendous dollar amounts due and you’ll open it and get that gut sinking feeling in your stomach. I want to tell you, you have to take a deep breath. If you’re working with us, go ahead and send that notice over to us. Or if we have power of attorney, we may have already received it on your behalf. We will take a look and advise you what needs to happen. In many cases, these notices can be resolved with a simple letter or phone call to the IRS or we may indeed find that the IRS system was right.

Maybe a piece of mail didn’t arrive or you lost a piece along the way or forgot something. So the moral to this is don’t freak out. If you get those letters from the IRS, I will tell you the worst thing you can do is stuffed them in a drawer and hope they go away. They won’t, so please work with your advisor, with a competent CPA who can help you resolve those notices in a timely manner. The worst case is to be waiting around and hoping they go away. They won’t. They’ll just continue to accrue interest and the notices will get meaner and meaner by the day. So I’m here to help. If you have any notices or love letters that you’ve received and you’re not quite sure how to proceed, we can help you come on board with us so that we will take care of all those for you in the course of normal business.

Donna Bordeaux, CPA with Calculated Moves

Creativity and CPAs don’t generally go together.  Most people think of CPAs as nerdy accountants who can’t talk with people.  Well, it’s time to break that stereotype.  Lively, friendly and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna and Chad Bordeaux.  They have over 50 years of combined experience as entrepreneurial CPAs.  They’ve owned businesses and helped business owners exceed their wildest dreams.   They have been able to help businesses earn many times more profit than the average business in the same industry and are passionate about helping industries that help families build great memories.