Why is my business getting a letter from the IRS?
4 min read
July 11, 2023 • Block Advisors
After you file your business tax return you may feel a sense of accomplishment… and breathe a sigh of relief. But the relief may be brief if you fear your business getting an IRS letter in the mail.
IRS letters and notices can happen to any business for several reasons, and we’re here to help you navigate them. Here are some things to consider if you get an IRS letter for your business.
Perplexed by an IRS letter?
Our small business certified tax pros are available to help.
Reasons the IRS may send a letter to your business
The IRS communicates with taxpayers by sending letters for a variety of issues. Here are a few of the reasons the IRS sends letters to businesses and why you may find one in your small business mailbox in the future:
- Your business is due a larger or smaller refund
- They have a question about your small business tax return
- They need you to confirm/update the responsible party or contact information associated with your EIN. (IRS Letter 6217C)
- They need to verify your business’ identity
- You have a balance due
- The IRS needs additional information
- The IRS changed your return
- There are delays in processing your tax return
- You are being audited
- You miscalculated your self-employment tax
How to handle an IRS letter for your business
You have a couple of paths if you’ve received a letter from the IRS. Of course, you could always address the issue on your own. We’ve outlined those steps below. However, we know that may take time you don’t have. That’s why we’re here.
Block Advisors small business certified tax pros can help you understand and respond to letters you receive from the IRS. For this year’s return, if you receive an IRS notice, our team at Block Advisors can review, research, and respond on behalf of your small business by adding Business Tax Audit Support to your return.
1. Determine what the business IRS letter means
When you get an IRS business notice, you can get more information about it from the IRS website. Simply type in the notice number located at the top right-hand corner of the notice. If you have further questions regarding your IRS business audit letter or notice, you can contact the IRS. The phone number is 1-800-829-1040. The IRS notice contains a contact phone number on the top right-hand corner as well.
2. Gather documentation to support your case
If the notice indicates that the IRS is questioning something on your business tax return, gather the relevant records corresponding to that tax year.
Pro tip: Whether you receive an IRS notice or not, make sure you’re prepared. Keep all tax and financial documents — You never know when you’re going to need backup documentation…
3. Respond to the business IRS letter or notice
If the IRS letter or notice for your business requires a response, you should respond by the specific date listed in order to:
- Minimize possible additional interest and penalty charges
- Preserve your appeal rights if you don’t agree with the notice
Keep in mind: IRS notices may not always be correct. That is why it is important to check your records and determine for yourself if you agree with the notice.
Is it really the IRS trying to contact you?
While IRS mail scams are not part of the IRS Dirty Dozen list, they are still common. So, what should you do if the IRS sent you a letter and you’re not sure it’s really them?
If the IRS sent your business a letter, you should make sure it’s coming from them. Be aware of these common IRS mail scam tactics:
- Demanding money immediately
- Making threats that seem overly grandiose or not in line with IRS common practices
- Not giving you the opportunity to appeal the claims listed on the IRS letter
- Demanding you pay in a specific way – the IRS allows you to pay outstanding tax bills in multiple ways
- Requesting that you call in a credit card payment over the phone
You can use the same number listed above (1-800-829-1040) to call the IRS to determine the legitimacy of the business IRS letter or notice.
Received a letter from IRS? Get expert help.
Remember, if your business received a letter from the IRS, we can help. Block Advisors offers solutions to taxpayers who have received a business IRS letter or notice and need help.
We can assist you in resolving a broad range of tax problems – from the simple to the complex, including audits, penalties, collection problems, and other tax account issues. Our small business certified tax pros are available year round, in-person and remotely online.